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HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




L,O^U. El 

AY 21 1992 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 6, 1992 
2:03 P.M. 



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Reported by: 


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Evelyn J. Mizak 


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Shorthand Reporter 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 6, 1992 
2:03 P.M. 



6 4/594 SFPL: ECONO JRS 
171 SFPL 09/28/01 20 



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APPEARANCES 
MEMBERS PRESENT 
SENATOR DAVID ROBERTI, Chairman 
SENATOR WILLIAM CRAVEN, Vice Chairman 
SENATOR ROBERT BEVERLY 
SENATOR HENRY MELLO 
SENATOR NICHOLAS PETRIS 

STAFF PRESENT 
CLIFF BERG, Executive Officer 
PAT WEBB, Committee Secretary 
RICK ROLLENS, Consultant on Bill Referrals 
NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

MOLLY J. COYE, M.D., Director 
Department of Health Services 

DANA GLUCKSTEIN, President 
Americans for a Safe Future 

OCTAVIA DIENER, Member 

California Transportation Commission 

LOUIS W. BARNETT, Member 
Unemployment Insurance Appeals Board 

BENJAMIN T. HACKER, Director 
Veterans Affairs 

PAM MANWILLER 

Union of American Physicians and Dentists 

KYONG HWAN P. KIM, Member 
State Board of Education 

JAMES VAN LOBEN SELS, Director 
Department of Transportation 

SENATOR QUENTIN KOPP, Chair 
Senate Committee on Transportation 



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APPEARANCES (CONTINUED^ 



EUGENE V. REYES 
ALIANZA 



GERALD W. JOHNSON, Managing Editor 
Small Business Enterprises 

RUSTY SELIX, Legislative Advocate 

California Association of Councils of Government 

JIM KNOX, Director 

Urban Affairs 

Planning and Conservation League 



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INDEX 



Proceedings 

Governor ' s Appointees t 

MOLLY J. COYE, M.D., Director 
^Department of Health Services 

Statement of Intent by CHAIRMAN ROBERTI 
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Motion to Open Roll for Vote to Confirm 

Requests for Clarification re: 

Holding Nomination on Floor 

Scope of Hearing 
Questions by SENATOR PETRIS re: 

Release Date on Tobacco Research Report 

Copies Received for Final Review 

Discussion of Report Findings at Press 
Briefing 

Release of Report to Press 

Meeting with Tobacco Education Oversight 
Committee and Constituency Groups 

Mass Distribution of Report 

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Availability of Report 

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Reason for Delay in Mass Mailing of 
Report 

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Official Release Date 

American Lung Association Contract and 
Affiliates 

December 12 Contact of DHS Staff by 
ALA Staff Requesting Letter 

January, Decrease in Available Funding 



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Pace 

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January 21 Conference Call re: Augmentation 

of New Monies Doubtful 18 

February 19 Notification to Confirm No 

Augmentation 18 

February 20 Filing of ALA Lawsuit 18 

Chronology of Events Does Not Suggest 

DHS Retaliation 19 

Lung Association Affiliate Contracts 19 

New Procurement Contracts in Spring, '92 19 

Proportions of Those Funded 20 

Shift in Nature of Proposals 20 

All Decisions Made within Tobacco 

Control Program 21 

Lack of Retaliation 21 

Peer Review of Applications 22 

Effect of Court's Decision on Prop. 99 23 

Occupational Health Program Problems 25 

Ability to Judge Programmatic Work 27 

Extended Involvement in Area 27 

Independent National Feedback on 

Quality of California's Program 28 

Offer to Meet on Periodic Basis 29 

Accusation of Incompetent Managers 29 

Discussion on Scope of Hearing 30 

Witness with Concerns; 

DANA GLUCKSTEIN, President 

Americans for a Safe Future 31 

Procedures for Adjudicatory Hearing 32 

Request for SENATOR MELLO to Represent 

Rules Committee in Negotations 33 



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2 Possibility of Media Blitz 34 

3 Excerpt from letter of DAN HIRSCH, President 
Committee to Bridge the Gap 35 

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Explanation of Committee ' s Plan by SENATOR 

5 MELLO 36 

6 Meaning of "Being Held on Floor" 37 

7 Questions by SENATOR MELLO re: 

8 List of Questions from ARNALDO TORRES 38 

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9 Bridge the Gap's Concerns with DHS Proposal 39 

10 Request for Clarification by SENATOR CRAVEN 39 

11 Selection of Administrative Law Judge 40 

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12 Appointment of Scientific Advisor to ALJ 43 

13 Location of Hearing 44 

14 il Weight to be Given to Evidence at Adjudicatory 

Hearing vs. Prior Hearings 46 

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Airing of Safety Issues as well as Scientific 

16 !' Issues at Hearing 48 

17 il Attempt to Limit Hearing to State Laws Only 51 

18 Need for 30-day Appeal Period after Completion 

of Hearing 53 

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Question by SENATOR MELLO of NANCY MICHEL re: 



Position of Legislative Counsel on DHS ' s 
21 Proposal 55 



22 Statements by SENATOR MELLO re: 

23 Importance of Ward Valley Issue 56 

24 Statement by SENATOR BEVERLY re: 

25 Nominee's Oath of Office 57 

26 jj Motion to Lift the Roll Call 57 

27 Committee Action 58 

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OCTAVIA DIENER, Member 

California Transportation Commission 58 

Background and Experience 58 

Questions by SENATOR PETRIS re: 

Smoking on Amtrak 59 

Current Ridership with Higher Fares 60 

Motion to Confirm 61 

Committee Action 62 

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LOUIS W. BARNETT, Member 

Unemployment Insurance Appeals Board 62 

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Background and Experience 62 

Questions by SENATOR PETRIS re: 

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Hiring of More Judges 63 

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Reason for Temporary Hires 63 

Number of Vacancies 64 

Salary 65 

Rec ru i tment 6 6 

Reduction of Backlog 66 

Need for Clerical and Backup Personnel 67 

Average Office's Backlog 68 

Problems in Van Nuys Office 68 

Discussion of Prior Hearings 69 

Principle Reason for Denial of Petition 70 

Length of Time for Claim to be Processed 70 

What Happens to Employee during Appeal Process 71 

Percentage on Welfare 71 

Fairness of System 72 

Suggestions to Improve System 73 



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Background and Experience 75 

Question by SENATOR BEVERLY re: 

Feelings about Marine Corps 76 

Witness in Support; 



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2 Motion to Confirm 74 

3 Committee Action 74 

4 BENJAMIN J. HACKER, Director 

Veterans Affairs 75 

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PAM MANWILLER, Representative 

10 State Employed Physicians, Dentists and Podiatrists 76 

11 ii Motion to Confirm 77 

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13 |:KYONG HWAN P. KIM, Member 

State Board of Education 78 

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| JAMES VAN LOBEN SELS, Director 

25 jj Department of Transportation 83 

26 Introductory Statement of Support by 
SENATOR QUENTIN KOPP , Chair 

27 | Senate Committee on Transportation 83 

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Background and Qualifications 78 

Questions by SENATOR PETRIS re: 

Who Is Grace M. Davis 79 

Ingredients to Improve Schools 80 

Questions by SENATOR MELLO re: 

English Speaking Ability upon Arrival 81 

English Proficiency 81 

Future Career Choice 82 

Motion to Confirm 82 

Committee Action 83 



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2 Statements by SENATOR MELLO re: 

3 Family Origin in Monterey County 85 

4 Background and Experience 86 

5 Questions by SENATOR PETRIS re: 

6 Smoking Policy on Amtrak 88 

7 Litigation over Definition of Service 88 



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Train Is State-funded 89 

Rise in Fares, Drop in Ridership 90 

Subsidization of Other Runs 91 

Amtrak Contract with State 92 

Statements by SENATOR MELLO re: 

Concerns of ALIZANZA 93 

Witnesses in Support: 

EUGENE REYES, Representative 

ALIANZA 93 

Request by SENATOR MELLO to Enter Letters 

into Record 95 

GERALD W. JOHNSTON, Managing Editor 

Small Business Exchange 95 

Special Edition to Salute CalTrans 95 

RUSTY SELIX, Legislative Advocate 

California Association of Councils of Governments 97 



22 JIM KNOX, Director 
Urban Affairs 
Planning and Conservation League 98 



Motion to Confirm 98 

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Committee Action 99 

Termination of Proceedings 99 

Certificate of Reporter 100 

j| Addendum: ALIANZA Letters 101 



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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 
CHAIRMAN ROBERTI: We will now take up Molly Coye, 
Director of Health Services . 

SENATOR MELLO: Mr. Chairman, do we have permission 
to have a camera? 

CHAIRMAN ROBERTI: Yes f we have a request for a video 
jtape from Alexander Media. Is there any objection? Hearing 
none, such will be the order. 

Ms. Coye, on your appointment, I have to catch a 



plane in less than a half hour. So, I will not be here. 

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I intend to vote for you, however. Therefore, if you 
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run up short, tomorrow, when I come back, I do intend to cast an 

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affirmative vote, in case you run into troubles, which I don't 
think you will. 

SENATOR MELLO: Mr. Chairman, may I ask you a 
tjquestion? 

CHAIRMAN ROBERTI: Right. 

If there's no objection from the Committee, I would 

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like to open the roll, and then have a discussion so that I can 

jibe entered as a vote. 

SENATOR CRAVEN: So move. 

CHAIRMAN ROBERTI: So Senator Craven moves that the 
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!vote on confirmation be recommended to the Floor. 

Secretary will call the roll. 

Please, no one else vote except me. This is in the 

Robert's Rules, Rules Committee rules. 



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SECRETARY WEBB: Senator Beverly. Senator Mello. 
Senator Petris . Senator Craven. Senator Roberti. 

CHAIRMAN ROBERTI: Aye. 

SECRETARY WEBB: Roberti Aye. 

CHAIRMAN ROBERTI: Senator Craven moves that the roll 
be replaced. 

Senator, you are now the Chair of the Committee. I 
will see everybody Thursday. 

SENATOR MELLO: Mr. Chair, before you leave, I just 
want to confirm and have you restate to the Committee what I 
asked you, just briefly, because a lot of the information 
regarding the agreement has just come out in the last hour or 
so. There are some differences between both sides. 

I just want for the record your position, as you 
stated to me, was that you — 

CHAIRMAN ROBERTI: Yes, we are going to do what we 
always do, and that is hold the nomination on the Floor for two 
weeks. That will give us sufficient time to work out any 
difficulties there may be as far as the agreement of Ward Valley 
and the confirmation of the Directors . 

But since they really are not intertwined completely, 

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Dr. Coye's nomination will proceed to the Floor, and then be 
held there. 

I'm sorry I cannot stay, but if I don't leave now, I 
will miss my plane. 

Senator Craven, you're the Chair. 

SENATOR CRAVEN: Thank you very much. 



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Mr. Chairman, before you leave, how deeply do you 
want to go into a regurgitation of what we've gone through 
several times in the past? 

CHAIRMAN ROBERTI: Only on the items that Senator 
Mello had regarding differences of opinion as far as the Ward 
Valley. 

Anything else as to confirmation really has been 
heard already. 

SENATOR CRAVEN: Is Senator Mello in a position to 
speak to that? 

SENATOR MELLO: Well, Mr. Chairman — 

SENATOR PETRIS: Before we go on to that, there's 
some unanswered questions from last time that the doctor was 
going to comment on, followed by a letter. So, we have a little 
bit more to cover. 

CHAIRMAN ROBERTI: That's fine. 

SENATOR MELLO: On that point, I think that I just 
had a brief time to look over. There's some issues and 
questions I want to ask regarding the adjudicatory hearing that 
I think are very pertinent. 

Secondly, there were some questions that Mr. Torres, 
who is here in the audience, Arnaldo Torres, or he's outside, he 
presented the Committee with a list of questions. His is not 
Ward Valley. His has to do with the farmworkers, and he had 
some questions there, a couple of them, and I think they're 
pertinent to the — because they deal with farmworkers caught in 
the squeeze of the earthquake and other issues that want to be 



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asked to Ms. Coye. 

CHAIRMAN ROBERTI: I have ten more minutes. 

SENATOR MELLO: So, Mr. Chairman, I think the fact 
that — I'd rather see — I mean, we've heard a lot of the 
information before, but I think the pertinent issues — I'm 
going to support her confirmation to the Floor, but I want to be 

materially involved in making sure that everyone has a chance to 

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be heard in the interim two weeks with their differences so that 

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we hope to get a memorandum of understanding that does reflect 

jthe transcript of what Russell Gould said earlier, what Molly 

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fcoye said earlier, about how this adjudicatory hearing would 

proceed. 

And based on the Legislative Counsel's letter, there 

are some unanswered deficiencies that I think have to be 

resolved. I don't think today, but I think they have to be 

brought up today and resolve in the next two weeks . 

SENATOR CRAVEN: Certainly I have no objection 

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following what you said. 

My only thought was that, it was my understanding 
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jthat we sort of brought this to a conclusion last week, with the 

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exception of that to which you have referred today, and that 

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!>/hich Dr. Coye is in a position to respond to today. And I 
[thought if we would cover that off, we would really be sealing 
the whole matter out to get ourselves in a position to cast a 

vote, and then let the chips fall where they may, I suppose. 

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SENATOR MELLO: But the thing is, though, 

JlMr. Chairman, I think that one person, Dana Gluckstein, who's 



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testified before, has asked for permission to talk. She's flown 

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up here from Los Angeles . She represents the group Bridge the 

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Gap, Dan Hirsch and others, and I think it would be very unjust 

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if she was not allowed to make a very short statement. 

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SENATOR CRAVEN: Was she invited? 

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SENATOR MELLO: Yes, I invited her. 

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I don ' t think people here have to be invited . I 

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think this is an open meeting. 

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SENATOR CRAVEN: Well, I just asked a question. 

I thought, you know, we had the round-up. We had a 
tremendous amount of testimony, if you will recall, last time. 
We heard from people we had never heard from before. 

If we keep having it open, there's always going to be 
some individual who wants to come from Lodi to tell us what they 

think, which is fine. But somewhere along the line, we have to 

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draw a line or else it's going to become a career. 

SENATOR MELLO: Well, I don't plan — I'm not going 

to filibuster the hearing. I'm not going to speak very long. 

I'm just going to raise about — 
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SENATOR MELLO : No , I'm anxious to hear what you have 

to say, Henry. I think that's very germane. 
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SENATOR MELLO: And then, as a courtesy to at least 

one person here, I would hope the Committee would hear this one 

person's statement. 

SENATOR CRAVEN: Okay. 

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SENATOR MELLO: And now, Mr. Torres — Arnaldo, donde 

esta? 



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SENATOR CRAVEN: If it's the Mr. Torres I think it 

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is, then — 
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MR. TORRES: No testimony. 

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SENATOR CRAVEN: That's fine. 
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SENATOR MELLO: What about the questions you 
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submitted to me? 
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MR. TORRES: We just want them asked for the record. 
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SENATOR MELLO: All right. Can I give Ms. Coye a 

copy of your questions? 
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MR. TORRES: Yes. 

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SENATOR CRAVEN: Fine. 

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SENATOR MELLO: Okay, I'll give her a copy. In the 
two weeks' time, let her reply to you directly. I think that 
would be adequate. 

SENATOR CRAVEN: That's fine. 

Mr. Chairman, do you want to jump back in here again? 

CHAIRMAN ROBERTI: Senator Petris has questions. 

SENATOR PETRIS: Dr. Coye, maybe we can save time by 

referring to my letter of last week, or is it this week, May 1, 

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jMay Day. 

Can you comment on any of the points that I raised 
there? I started with, last time we talked about the 
University report, and how much time, if any, elapsed between 
iits proposed release date and its actual release. There's a 
'huge gap there. And your intention, the intention of others. 
That ' s one of the questions . 

The other one is on how many requests for proposals 



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were put out under 99 for local groups, and how many were 
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placed, and how many are still in place? There's still a big 
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dispute over whether or not there was a cancellation, and if so, 
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how many? 

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Maybe you could help us by telling us what's 
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happening right now. 

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DR. COYE: Let me just go through essentially three 
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issues, because there's two parts of the second issue that you 

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[raised. 
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First with regard to the release of the tobacco 
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[[report, as of today, 1900 copies have been distributed. And let 



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me take you through the chronology so you can understand clearly 
how this came about. 

In the week of January 7th, two copies of this were 
received from the researchers in the Tobacco Control Section for 
final review. 

January 14th, Dr. Pierce, from the University of 

jCalifornia, San Diego, one of the researchers, discussed these 

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report findings appropriately at a press briefing sponsored by 
the American Heart Association in Texas. Our program staff knew 
of and had okayed, in so far as they need to, but they've been 
supportive of, Dr. Pierce appearing and presenting some of the 
results of that work. 

SENATOR PETRIS: In Texas? 

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DR. COYE: Yeah, that was when it hit the press, on 
January 14th. 

We first got press calls about that that evening of 



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January 14th, and I was called at home about this and didn't 
know anything about it. The press staff had not — you know, 
didn't know much about this at all. And so we said, "Let's get 
the report and look at it . " 

And the next morning, before I came into the office, 
I called in and I said, "I don't want to risk any accusations 
about this being sat on. Release it to the press now. Make it 
available to the press now. " 

And we have several reporters, including Associated 
press, who are willing to meet with you and assure you that they 
lhad access to the report. 

We only had physically one copy of it at the senior 
jlevel in the Department. That was Xeroxed and FAXed out to a 
number of press. Other press people came to our press offices 
and looked through it. 

Initially, in response to some press calls that first 
evening, the press office said, "We are looking at it, and we 

don't know yet when it will be released." And that got into the 

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papers and generated a very public impression that we had 

delayed access for a long time. But in fact, there were 

multiple press people who got it beginning that very next day, 

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'within twelve hours, and we have good demonstration of that, or 

good evidence of that. 

SENATOR PETRIS: Is that in the form of printed 
stories? I guess that's the best evidence. 

DR. COYE: I don't know. I'll be glad — I'll meet 
with you and give you all the evidence. 



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SENATOR PETRIS: Well, if it's like some of my 
releases, they didn't print anything, so we'll see. 

[Laughter. ] 

SENATOR PETRIS: That's not your problem. 

DR. COYE: In any case, yes, I would say that we have 
very extensive confirmation of the fact that people had copies 
of this . 

From January 15th, that next day that I'm talking 
about, until February 19th, this was available to the press, or 
to anybody else, on request through the press office. That's 

normally — as a matter of fact, there's — normally, this 

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iwouldn't have even been out there until we did a formal mailing 

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lout as a program distribution. But once we had made it 

{{available to the press, it continued to be available through the 

press, and program staff were proceeding with the process of 

iinternal review. And they got an additional external review, 

and proceeding with, you know, cleaning up the typographical 

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stuff and getting it ready for the procurement for the printing 

of 2,000 copies. 

In the meantime, on February 19th, I had invited the 
jTobacco Education Oversight Committee, and more than 15 
different constituency groups, including the Lung Association, 
Ito meet with me, because I wanted to hear their concerns in the 
midst of all of this controversy. And in our discussion, they 
said that they wanted to speed up; that they thought that the 
formal mailing out of the report should have already happened. 

I pointed out to them that it had been available 



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through the press, and many of them had in fact received copies 
that way. And that I was surprised. I didn't know that it had 
not been formally mailed out yet. 

But Dr. Bal, Dileep Bal, who's the Program Director, 
assured me that it was in final typographical clean-up, or 
something like that. 

SENATOR PETRIS: When was that? 

DR. COYE: That's on February 19th. 

And the next day, he furthered — I think it's called 
a procurement order for the 2,000 copies to be printed. Those 
copies were all printed. 

On March 30th, when the printing was done, we did a 

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mass distribution of the more than 1900 copies, including 

distributions to all Members of the Legislature, the Tobacco 

Control Programs, county health departments, et cetera, with a 

yery strong supportive cover letter from me . 
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SENATOR PETRIS: Maybe it depends on which dates 

we're talking about. 

Last week, when I brought it up, I think you had 

indicated that it was released within 24 hours. I don't know, 

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;!24 hours of what? Of the January date? The February date? Now 
jwe're talking March. 

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DR. COYE: No, it was released on January 15th, in 
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'that everybody who called in — this is a very normal process. 

SENATOR PETRIS: What is the title of that report? 

Is that "Tobacco Use in California"? Is that the title? 

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DR. COYE: I think — I actually don't recall the 



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exact words. I assume, yeah. It's the one that Dr. Pierce 

prepared in San Diego. 

SENATOR PETRIS: I have a copy of a letter here to 

Dr. Bal from Lawrence Walleck, Doctor of Public Health. And he 

says, and I'll just quote a small part of it, this is February 

12th: 

"I'm writing to you as a member 

! of the Evaluation Advisory Committee 

for the Tobacco Education Program 

and as a public health professional 

concerned with one of the greatest 

threats to health in California. I 

was extremely dismayed to hear that 
I 

the report, 'Tobacco Use in 

California,' authored by Drs . Pierce 

and Burns, has not been released." 

i And this was dated February 12th. 

"On January 28th, the 

ij 

Evaluation Advisory Committee voted 

|i 

unanimously to urge the state to 
immediately release this valuable 

SI 

report . " 
So, according to him, it had not been released on 

January 28th, and of the writing of this letter, it had not 

been released. 

And yet, you feel it was released — 

DR. COYE: Well, it sounds like to me that we're 



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talking about just a difference in the word "release." My 
sense of release was to make sure that something that was a 
very controversial report was available to the press while we 
proceeded with the internal process of getting it ready for 
this formal mailing out. 

He's apparently referring to the formal mailing 
out. That formal mailing out was what was accomplished on 
March 30th. But that all of the information in there was fully 
available because what I had done in January. 

SENATOR PETRIS: What would you have to do get it? 
Available to whom? The general public? The scientists? 
What ' s the distribution? 

DR. COYE: When it's made available to the press, 
in that early stage, basically anybody who calls in can get it. 

It's very important to understand, with a research 
report, the moment it comes in, or the next week, is not when 
you normally have it all ready and mail it out for that 
widespread distribution. 

When I found out in that meeting on February 19th 
with the Tobacco Education Oversight Committee that it hadn't 
in fact been mailed out, which I looked at as a technicality in 
the sense there' d be no reason to delay that if we'd made it 
available to the press, which was the broadest coverage of it, 
when I — 

SENATOR PETRIS: That's the early date? 

DR. COYE: Yes. 

When I found out that we hadn ' t in fact done the 



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formal distribution mailing, at that point I was very 
surprised, and I said, "Can't we speed this up?" 

And so the next day, they cut the order. And 
Dr. Bal told me that the reason that it had taken, you know, 
four weeks or five weeks, or whatever, was in part because they 

were handling all of the second procurement for the contracts, 

i 

for the local-based contract system, and they'd just been 

swamped with that . And they hadn ' t gotten to the typographical 

!clean-up and the procurement order. 

And a lot of the attitude was, since it was already 
[available through the press, that a lot of the information was 
put there and very clearly being discussed and debated, and 
everything. 

So, as soon as it came to my attention that the 
formal release, in the wording of — I'm sorry, the person who 



16 

iwrote to you — 



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SENATOR PETRIS: Not to me, to Dr. Bal. 

DR. COYE: Yes. 

i 

So, I mean, at each stage, both within immediately 

ifinding out about the press statements on the 14th, and later 

i| 

finding out about the fact that the more formal mailing hadn't 
happened, we attempted to make it immediately available. 

But the normal process would not have been even to 
have that press availability from the January 15th until March 
30th. Normally a press — a research report doesn't go out 
until you do this formal business of procurement, printing up 
ihowever hundreds of copies you're going to do, and then mailing 



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it out. It's only because of all the controversy swirling 
around this that we pushed to get it out through the press 
initially. 

SENATOR PETRIS: Well, I guess there's a difference 
between the report the press gets. That's probably a kind of a 
summary of its findings. 

DR. COYE: No, no. 

SENATOR PETRIS: The data that supported that 
didn't go with it to the press; did it? 

DR. COYE: No. For anyone who wrote in, they could 
get initially the executive summary and eventually the whole 
report, and they could come in the same day, and A. P. did and a 
number of other press people, to our offices, because we only 
Jiad one cope of the whole thing, and sit down and read the 
entire thing. 

SENATOR PETRIS: How long is it? 

DR. COYE: About that thick. I don't know the 
number of pages . 

But, I mean, again, if that researcher had not gone 
ahead and talked about it there, the normal process would have 
been when we were physically capable of distributing 2,000 
copies , it would have gone out . But because it was 
controversial and got discussed before we had that many copies 
printed, the best we could do was say, "Either come read it 
here, or we'll Xerox them and we'll give you first the 
executive summary, and if you want more, then we'll give you 
the full thing. " 



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SENATOR PETRIS: So, the more or less official 
full release date was March 30th? 

DR. COYE: Yes, depending on how you're using it. 
SENATOR PETRIS: I have another letter from the 
Tobacco Oversight Committee — Tobacco Education Oversight 
Committee, dated March 21. And that says that their committee 
met on March 16 and discussed the report. It's referred to as 

the "UCSD Surveillance Data Report". I guess that's the 

ii 

official title. 

i I 

"We were pleased to learn of 
its imminent distribution. " 
I guess they're referring to the later date that you referred 
to. 

DR. COYE: Uh-huh. 

SENATOR PETRIS: Well, that's still a long way from 
January, but I guess as of now, or at least as of the end of 
March, there's no more problem of distributing to the public, 
or the press, or anyone else who's interested. 

DR. COYE: And there's absolutely nothing abnormal 

when you get a big research report like that in in early 

January, all the process of the further reviews, and everything 

[else to get the 2,000 copies printed up and mailed out by the 

;end of March, would have been all due speed for any of our 

I 1 

normal operations . 

It's because of the controversy swirling around 

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this, and the fact that we released it to the press before we 
had enough copies to make it generally available, that this 



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whole thing came up. 

SENATOR PETRIS: What was the controversy? Were 
they disputing the conclusions in the report? 

DR. COYE: It was because of the 99, the Governor's 
proposal in the budget. That's what I mean by controversy. 

SENATOR PETRIS: Oh, the other portion. 

DR. COYE: Yes. 

SENATOR CRAVEN: Do you have more, Senator Petris? 

SENATOR PETRIS: Yes. 

DR. COYE: There are two other issues that you've 



raised. 
12 

SENATOR PETRIS: That I raised in the letter. 



13 



DR. COYE: The next issue, and what I'm going to do 
14 

is address first of all the American Lung Association contract 



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itself, and then talk about the affiliates issue. You asked 

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about both of those. 

With regard to both of them, however, there was 
absolutely no retaliation, and I think that'll become clear to 
you as I go through the facts in the case. 

The single largest contract in the entire Tobacco 

|j 

liControl Program through any of the procurement cycles was the 

ii 

1.9 million that was contracted with the American Lung 
Association of California, and a further 400,000 augmentation 
that was added at our discretion for a mass media smoking 
cessation campaign. That's different from the big media 
campaign, obviously. 

On December 12th, our program level staff, below 



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r. Bal ' s level, and he wasn't even aware of all of this, was 
contacted by an ALA staff person from their headquarters who 
was concerned because they wouldn't be able to expend all of 
their monies within the time limit of the contract; that they 
in fact — that there were plans within the ALA to begin to lay 

pff staff. And they asked for a letter assuring the ALA that 

i 

jthey would be able to extend their contract in order to expend 
the current remaining funds, not to get more money, but to 
expend the current funds, so that that person's job would be 
eld secure. And that person dictated the content of the 
letter to our staff person, and it was fully within the 
discretion of our staff person to do this. It was an 
appropriate action. They prepared the letter and sent the 
letter to ALA. 

It said that the purposes of doing this, of 
extending the contract, was both to finish the work of the 
first contract, and also to allow them to prepare a submission 
for a second contract. 

So, there was no commitment to funding a second 
contract . It was for them to prepare to compete in the next 
round . 

Then, that was in December. By January, with 
looking at the decrease in total amount of under that would be 
available to fund the next cycle of the education grants, our 
staff was very concerned about whether they would want to 
renew. And again, this is at the program level, and it's 
appropriate for them at this level . Were very concerned about 



18 



A 



whether they would want to again issue a contract as large as 
the ALA contract was, which would replace or be instead of 
jlO-15 grants of normal size of grants that we made. 

And given the lower amount of money available, and 
the scorings on the independent peer review of the ALA 
contract, they then contacted on January 21st the ALA. Three 
of our staff were jointly on a conference call with that same 
staff person in the ALA to tell them that — to notify them 
that because future funding was going to be decreased, there 
was going to be less money available and more applications 
coming in, that it looked extremely doubtful that there would 
be a further augmentation, an addition of new monies, into the 
LA contract. 

On February 19th, our staff, again, notified ALA 
for sure, confirming this, that we would not augment the grant 
with new monies because there were 300 applications received 
for this new pot of money, and that there — what they had 
communicated on January 21st, that it didn't look likely, was 
now confirmed. 

On February 20th, the ALA lawsuit was filed. 

I would suggest to you that, given the fact that in 
January, well before the filing of the lawsuit, that the 
program level staff — none of this had any involvement from me 
or any senior level people, even Dr. Bal, although I would have 
concurred with all of the steps that were taken here — that 
given the fact that they notified them well in advance that the 
formal notification was before, not after, the lawsuit filing, 



19 

ithat the chronology suggests more that the lawsuit was in 
retaliation against us for our actions than the other way 
around . 

So, I think the chronology does not support this 
accusation at all. And as a matter of fact, if their suspicion 
was correct, during that January and February period, we would 
have been attempting to curry favor with them to get them not 
to file a lawsuit, not saying to them: we don't think we're 
jgoing to be able to fund your lawsuit [sic]. It really, I 
on't think, holds water as a charge. 

The next issue is the issue of the Lung 
Association affiliate contracts. Of the eleven — they — 
initially there were eleven Lung Association affiliates that 
had contracts, and now there are three of them that are funded. 
Of those eleven contracts, only nine applied for new funding in 
this current cycle. One of those didn't even meet the minimum 
requirements. So, we're down to eight out of the eleven. 

Now, of those eleven or even eight, many of them 
had already been refunded, in some cases multiple times. 

This current procurement round in the spring of '92 
that we're talking about, we had to award only $18 million in 
awards out of 100 million in funding requests. So, we had to 
eliminate a fair number of applicants. This was in comparison 
with 53 million to fund these in the last cycle. 

This was clearly and explicitly stated as a 
brand-new procurement. There was no assumption going in that 
someone who ' d been funded in prior rounds would be funded this 



20 
(time. It was clearly stated that this was an open competition. 

Of those eight, two were funded initially and one 
on appeal. Of the total 300 applications, a total of 99 were 
finally funded; eight of those on appeal. So, the proportions 
are very, very close in terms of ALA affiliates in comparison 
with the entire field. 

Furthermore, all of these proposals were peer 
reviewed by nearly a hundred expert reviewers from across the 
state and the country. And the major direction, if you look at 
the shift in the nature of the proposals that were funded, is 
that far more focusing on Hispanic, African-American, Asian, 
Pacific Islander, Native American organizations were funded, 
[that there's explicit directive in the initiative that we 
should go in that direction. 

In the first round, many of those groups were not 
prepared and were not as competitive, and the ALA got a massive 
chunk of the money in the first round. But in this second 
round — or I think it ' s the third round because there was 
augmentations right after the first round — there was a real 
attempt on the part of program staff and reviewers to stake 
into account the nature of the organizations that were 
applying. And apparently, by those criteria, ALA did not do as 
well. 

So again, the facts of the matter, they did well in 
terms of proportionate number of grants. They did — certainly 
in terms of dollars it was a tremendous decrease, but that 
given the fact that there was a program decision to turn away 



21 

ifrom one, single, large grant of 1.9 million in the direction 

! 

bf these smaller community grants, is something that you 
Certainly would have expected to see happen. 

And finally, these decisions were entirely made 
iwithin the Tobacco Control Program. There was neither 
knowledge nor participation from the Deputy or myself, or any 
other of the senior level people within the Department. That's 
the way we want to conduct these things, and the way we have 
conducted them. 

So, in order to suspect that there was a 
retaliation against the Lung Association, you would have to 
assume that there was some animosity on the part of our program 
staff towards the Lung Association. Most of those people are 
thoroughly committed to the same causes that the Lung 
Association has supported for years. They've worked closely 
together for years. If anything, I would largely suspect that 
the program staff were distressed by the reallocation of the 
funds and highly unlikely to try to retaliate against the Lung 
Association for taking steps that they may be very sympathetic 
with, in fact. 

So, I think that while on the one hand it's very 
understandable to me why the Lung Association, because of the 
fact that they're very upset about the overall policy 
decisions, would see some discrimination or retaliation in 
this, that in fact, when you look at the patterns and the 
rationale, and the level of people who made the decisions, and 
the peer review participation in it, that in fact it doesn't 



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|support any attempt to retaliate, or any reality of 

[[retaliation. 

ii 

SENATOR PETRIS: Can you tell me a little more 

l^ibout peer review? You mentioned a hundred scientists 

throughout the state. 

DR. COYE: What we have, I think it was either 20 
r 30 percent of them are from out of state, because part of 
the attempt is to have people outside of the state so that 
there's some objectivity, and just not all people who know the 
situation competing against each other. 

But there's a peer review process and a ranking, 
and there's a — first, as I understand it, a general cutoff 
line that's drawn to say that below that line, these 
applications are not even acceptable. Then there's a priority 
ranking above that line, and once that ranking has been 
forwarded by the peer review system, then there is a process by 
which within that upper tier, there is a re-sorting to make 
sure that both minority groups and geographical balance is 
achieved. 

The Lung Association application barely made that 
first cutoff in the peer review. So again, our program level 
staff, when — 

SENATOR PETRIS: Why was that? Was that a lack of 
ability to carry out the contract? 

DR. COYE: I truly don't know all of the reasons. 
The one thing that the staff mentioned is that a very high 
priority was given to the ability to work with minority 



23 



ibopulations, or target effectively minority populations and the 

2 r 

(geographic distribution. 

I'm not sure that that's the reason why. There may 
nave been other more important reasons, but we completely dont ' 

pet involved in this. 

II 

So, I'll just stop there. 

SENATOR PETRIS: Let me ask you about the effect of 
the Court's decision on the other part of it. What are your 
plans now? 

DR. COYE: Well, first of all — 

SENATOR PETRIS: Are you going to appeal? And if 
you are, you have a perfect right to. I wouldn't challenge 
that. 

But my question is, where do we go from here? 

DR. COYE: We will not appeal. I make this 
commitment and the Governor makes the commitment . We do not 
plan to appeal the decision. 

As you know, we just got the final court order 
yesterday, and so, we're now reviewing what we need to do. And 
there's obviously hard decisions to make, including where we 
will take the money from in our services. 

SENATOR PETRIS: Well, it's too early to tell. 

So, the decision on the local contracts, that 99 
were awarded, whatever changes were made were not driven by a 
budget consideration? They were within whatever the budget 
amounts that were available? 

DR. COYE: Yes, if I understand you correctly. 



x 



24 

They were not — they were driven by the program, 
what it could achieve, and how much money was available to fund 
them, because there had to be a cutoff line in terms of 
funding. 

SENATOR PETRIS: What was that total? Was it 
around 15 or 16 million? 

DR. COYE: No. Just a second. I want to make sure 
I give it to you accurately. 

There were — oh, I'm sorry, yes, $17 million, 
oughly. 

SENATOR PETRIS: I thought it was somewhere in 
there . 

How long is that going to last? Is that done on a 
fiscal year basis or a calendar year, those contracts? 

DR. COYE: I honestly don't know. I'd be very glad 
to get the information and give it to you. 

SENATOR PETRIS: That's all right. I guess 
logically it would run like everything else — 

DR. COYE: I would assume at least, yeah. 

SENATOR PETRIS: Let me ask one other area, then 
I'll give you some breathing time. 

Have we answered the questions that I raised in the 
letter? I guess you have. 

I had also raised last time the question of some 
occupational health. I was interested in that because I've 
carried more than one bill. One of them created part of the 
program . 



25 

Without giving any names, I asked you last time 
about the problem, because I've been hearing a lot of static. 
I've been hearing some horror stories about things allegedly 
going on internally. And you described that as a disgruntled 
employee . 

However, that same employee has had very high marks 
from the Department over a period of time, and I think you had 
some good words for this person, too, at one time. 

Now I learn that she kept complaining about the 
deterioration of the Occupational Health Program in several 
different categories. One was the lead problem under Senator 
Torres ' s bill; another one was my problem of trying to identify 
what the work risks were from a health standpoint. 

I have the impression at one point, based on the 
legislation and the way the pioneers in the Department who 
administered it, it was one of the model programs for the whole 
country. And now I'm learning that it's just the opposite; 
that it's not holding up to that high standards of before. 
Morale is terrible in the Department. This one person in 
particular has now been informed of demotion with a severe cut 
in pay, after having pioneered this wonderful program. 

That's kind of unsettling, to say the least. I'm a 
little nervous about it because we had similar problems in 
other — in the field of pesticides. I wish you had been there 
at the time these other problems came up. I have a hunch that 
you would have put your foot down, wouldn't have let it happen. 

But we had reached such a low state in the 



26 
bepartment that regulated pesticide sales, registration and 

se, that the political appointees in that office were 
overruling the scientists. You've probably heard the story. 

Eighteen scientists just quit in disgust. They 
said, "It destroys the integrity of my work as a scientist to 
have me do this evaluation and advise the Department that this 
particular application should be rejected, either because it's 
a dangerous substance, or they just haven't supplied us with 
enough information to enable us to evaluate their own reports . " 
They'd be overruled. The stuff would be sold, endangering the 
health of people. As I say, finally 18 of them quit. 

Now , we haven ' t had that happen here , but I ' ve been 
getting reports. I have to admit, some of them are anonymous 
because they're scared to death. There's been intimidation 
charged, and threats of doing this or that. 

So, I'd like to get from you your understanding of 
what the situation is there. Again, as I said in my letter, 
I'm not accusing you of doing any of these things, but a lot of 
things can happen when you ' re running the biggest Department in 
the state, and you can't be everywhere at all times. And 
there ' s certain permanent people or new people who assume a lot 
more power than they should, and they can wreak havoc by the 
time somebody reins them in. Havoc is what I've been told is 
what's going on. 

Can you comment on that in the Occupational Health 
and Safety part of your responsibilities? 

DR. COYE: Yeah. You know — 



27 

SENATOR PETRIS: I could be more specific if you 
like. But just give me an overview and — 

DR. COYE: Let me try and see if it meets your 
concerns . 

As you know, and I mentioned again before, this is 
not only an area that I have a lot of background in and care 
about, but it's also an area because of that that I feel fairly 
competent to judge programmatic work. 

And when some of these problems came to light and 
reorganization was proposed, and in — as we were also 
reorganizing prevention services, in other words, setting up 
divisions and branches on that side, I asked specifically in 
that area, under all of Environmental and Occupational Health, 
to have a full presentation of the work plan, accomplishments, 
potential barriers, and you know, anything else the staff felt 
was relevant, from all of the units in that area, and also from 
the leadership of that area, so I could evaluate the leadership 
in terms of the charges that were being made, such as the ones 
that you ' ve mentioned . 

I personally sat through those presentations. I 
met with the people leading each of the smaller program areas, 
the overall leadership of that area, the leadership of the 
Occupational Health section within the Environmental Health 
area. I wanted to hear for myself what everybody involved 
thought and wanted to accomplish, were currently doing, what 
the issues were before that part of the Department. 

That ' s an extended involvement that I have not had 



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kith most of the areas of the Department. I spent a lot of 
time on this. 

I also spent time on the phone with NIOSH and with 
other bodies that would give me some independent national 
feedback on how our various staff were doing when they 
presented scientific papers, when they attended working 
conferences at CDC and NIOSH; what is the perception of the 
level of work in the Department, the innovativeness, the 
creativity, et cetera. And I know those people well enough to 
get a straight answer from them. 

I am assured both by what I heard and what I've 
seen in subsequent work products, and by the discussions with 
the national leadership in this area, that while yes, there are 
— there is one particular individual, but several people who 
are colleagues of her that are supporting that cause, who are 
unhappy with some of the — what they see as changes to their 
personal situations, that in fact, what they are presenting as 
a diminution of our policy work, or — I don't know how to 
characterize it, and maybe it's in some of what they've written 
to you — but a misdirection of our work, I believe, is 
completely not the case. 

I took this very seriously. It would be something 
that would be very painful to me if, after being here for three 
or four years, people said that we had gone downhill in that 
area, because my record in New Jersey was one of real 
accomplishment and something that I'm very proud of. 

So, I have a personal stake, in addition to your 



23 



29 
own commitment and personal stake, and I would be glad to meet 

i 

With you, even periodically, and review this with you 

SENATOR PETRIS: Yeah, I would welcome that. 

DR. COYE: Because it is something that I'm very 
interested in and very concerned about . 

But I really feel quite confident of the course 
that we 're on . 

SENATOR PETRIS: Well, I guess I'm going to have to 
meet with you and go into more detail, because the allegations 
have to do with some practices of management, management- level 
people, looking the other way while new Occupational Health 
supervisors have taken actions that have seriously antagonized 
key players, not just one, in Occupational Health, such as 
Workers' Comp. insurers, through incompetence in implementing 
new legislation. The management level is just not being 
competent, according to this. 

DR. COYE: I've reviewed most of that, and I really 
do not agree. And I think it at least is debatable, given my 
background. If I disagree, it's at least not an open and shut 
case that this is a problem. 

I also think that I have to point out, simply 
because this has gone on for some period of time, that the 
allegations against this employee are quite serious also, and 
that I think that we have to look at some of what is said here 
in light of those allegations; that this is both a personnel 
issue and, as apparently alleged, it is a personal policy 
disagreement. 



30 

SENATOR PETRIS: Well, can we do that? 

DR . COYE : Sure . 

SENATOR PETRIS: Okay. 

I think that exhausts the subject matters that I 
had in mind. 

Thank you. 

SENATOR CRAVEN: Let's take a ten-minute recess. 
[Thereupon a brief recess was taken.] 

SENATOR CRAVEN: We have now Senator Mello with us. 

Senator Mello, if you would be so kind to pick up 
on those items which you had, and you can explain it to 
Dr. Coye, and then she can tell you what answers she has. 

SENATOR MELLO: Mr. Chairman, am I going to be 
limited to my questions? What's the plans of the Chair? 

SENATOR CRAVEN: Limited in what way? 

SENATOR MELLO: Well, by the Chair. 

SENATOR CRAVEN: By time, you mean? 

SENATOR MELLO: By time or — 

SENATOR CRAVEN: Well, I'm just going to leave that 
up to your good judgment, Henry. 

SENATOR MELLO: Thank you. Well, I hope to have — 
like I say, I'm not going to take a lot of time, but I think 
this is an important enough issue. I don't want to be cut off 
by the Chair for any reason whatsoever, but I want to be able 
to get my questions . 

SENATOR CRAVEN: Well, I want you to do that, 
Henry, but I'm sure you'll do it as succinctly as possible. 









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SENATOR MELLO: Let me ask the Chair this, if I 

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(may, I don't want to cover ground that Dana Gluckstein has 

asked to testify. If we could have her speak, she only wants a 

few minutes to go over her point. 

SENATOR CRAVEN: Would you prefer that she speak 
before you? 

SENATOR MELLO: That's my request, and then I think 
it would save time, because I will not cover ground that she 
might cover in her statement. 

SENATOR CRAVEN: All right, fine. Let's do that. 

The lady ' s name is , again? 

SENATOR MELLO: Dana Gluckstein. She's with the — 
several organizations that she will introduce the organizations 
she's representing here. 

SENATOR CRAVEN: Fine. 

Ms. Gluckstein, you've been here before. I never 
forget a face, particularly one like yours. 

SENATOR MELLO: An Irish face. 

SENATOR CRAVEN: Well, regardless, but the one 
thing that I would like, in the most benign admonishment that I 
can summon, don't take too long. 

MS. GLUCKSTEIN: You have my word. I'm the only 
one that's here today, and will be summarizing briefly for all 
of the constituencies that I represent across the state. 

Thank you very much. 

SENATOR CRAVEN: Thank you. 

MS. GLUCKSTEIN: I'm Dana Gluckstein, President of 



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32 
ericans for a Safe Future. 



Thank you, Senators, again for the privilege of 
testifying before you. 

I wear black today as I am in mourning for the 
great sadness we have lived through these past days in the war 
zone of Los Angles. As before, I've been asked to represent 
thousands of members of the entertainment industry, women's and 
environmental groups. There are others who would, under normal 
circumstances, be with me today, but are devoting their efforts 
around the clock to repairing the soul of Los Angeles. 

It was just yesterday evening when I received final 
word that the procedures DHS laid out for the adjudicatory 
hearing purposely erode and violate the substance of what was 
agreed to before this very Committee in April. I have waited 
hopefully and patiently for the past month, believing naively 
that the Rules Committee received a commitment from the DHS to 
set procedures that would ensure a fair adjudicatory hearing 
process for Ward Valley. Such fair procedures that would 
include a trial before a mutually acceptable and neutral judge 
without a preordained outcome, as well as assurances that he 
central safety issues be resolved in a fashion where the public 
would feel confident in the outcome and confident that our 
health and welfare would be protected. 

I assumed that one month certainly was enough time 
for DHS, the Legislative Counsel, and the Rules Committee to 
resolve interpretation questions from the April 9th 
transcripts, iron out unresolved matters, and in particular, 



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33 
the selection of the judge. 

Unfortunately, this has not been the case. I know 
that the Senate Rules Committee has worked with great courage 
and integrity to uphold justice. It would be a great insult to 
have your hard work turned into a mockery. 

I'm sorry, this was written very early this 
morning, at 4:00 a.m., and I was hoping that Senator Roberti 
would be here. I knew he was on a short time line. I will 
keep it as I have it, and then hopefully, have just a very 
rief, brief discussion about it. 

Senator Roberti, I understand what a difficult time 
this is for you with the recent tragedy in our home town. To 
alleviate some of your workload at such a stressful time, and 
because we have an additional two weeks to iron out a fair 
agreement, I request with your permission that Senator Mello 
represent the Senate Rules Committee. He would work closely 
with Legislative Counsel, Lisa Brandt of DHS, Nancy Michel and 
Dan Hirsch to resolve these outstanding differences in the most 
expedient fashion. 

Please know that the last thing we wanted was to 
request that the Rules Committee delay the confirmation of you, 
Dr. Coye. Dr. Coye, I know you have earned respect as one of 
the finest public health officials in the country. We want to 
see you confirmed, and hope and know that that will happen. 

At the April hearings, Senator Petris eloquently 
spoke to you and said that, indeed, you have inherited a 
difficult and dangerous legacy with Ward Valley. It is up to 



34 

you, and you alone, to have the courage to bring to light the 
whole truth, because it is in the best interest of the citizens 
of California. 

Unfortunately, I believe that if we do not come to 
some conclusion here today as to how we will reach consensus on 
the process that will ensure a just hearing, this Committee 
(will never see that happen. In fact, without your vigilance 
and continued leadership, the victory you fought so hard for, 
to protect the public health and welfare for future generations 
of Calif ornians, will be turned into a trial of the absurd, 
where a verdict will be preordained, and the rights of the 
citizens haven't a chance. 

The people I represent here today are also weary of 
this battle against our very own government agencies. I want 
to believe that we have learned from the vents in Los Angles 
last week. What we should have learned, and what I hope our 
Administration has learned, is that you cannot manipulate and 
hide the truth without enraging people. 

We do not want to have to create a major media 
blitz around the DHS ' s indiscretions. We just want an honest 
adjudicatory hearing. But if this does not happen, we will 
expose the truth as people have a right to know. 

I thank you, Chairman Roberti and Senators, for 
listening to me once again. You have dignified this difficult 
process for so many of us. 

I would like to just refer to a copy of the report 
that you have from our key expert, Dan Hirsch, a response that 



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he wrote at noon as he just received the final comments from 
Legislative Counsel. It's very important for the record. It 
states: 

"We have three major areas of 
concern: 

"(1) We do not believe it 
fully reflects what DHS and 
Secretary Gould agreed to at the 
April 9 Rules Committee hearing 
regarding several significant 
matters . These are detailed in this 
memorandum . 

" ( 2 ) The letter does not 
address at all a number of 
outstanding guestions regarding the 
procedures to be employed . . . 

"(3) Most importantly, despite 
a commitment to consult on the 
selection of the ALJ for the 
hearing, no such consultation has 
occurred. Even the precise method 
for selecting the ALJ has not been 
discussed or resolved. The 
selection of a truly neutral trier 
of fact, one not 'in DHS ' s pocket,' 
is critical to the agreement reach 
on April 9 . " 



36 

It is my understanding, having heard Senator 
Roberti, that Dr. Coye will be confirmed in this Committee. 
Everybody believes that Dr. Coye, you will be the best person 
to lead this state. 

I ask the Senators now, how will we be assured that 
the things that were committed to in April will indeed happen? 
What is going to guarantee that? I have to go back and tell 
this to many, many people, and I don't know what to tell them. 

Thank you. 

SENATOR CRAVEN: Very good, thank you very much. 

Now, Senator Mello. 

SENATOR MELLO: I'm going to try to answer her 
question, and I asked Senator Roberti the question to restate 
it here. He said to me that, and he voted — he requested a 
motion being made so Dr. Coye ' s nomination could be recommended 
to the Floor. 

He said his plan is holding her up for two weeks on 
the Floor. That would take it to May the 18th, on a Monday, 
would be the final date prior to the May 19th date, during 
which time he's going to assign some of his staff people, with 
Leg. Counsel, and with the Health Department, to continue to go 
over these differences to see whether or not we can bring them 
together and come to agreement on a single document that would 
be made part of the record and placed in the legislative 
Journal . That ' s the understanding that I have from Senator 
Roberti in a conversation with him today. 

I think he further confirmed that prior to him 



37 
leaving here today. 

Hopefully that answers your question. 

MS. GLUCKSTEIN: Senator Craven, may I ask one 
question to you, please? 

SENATOR CRAVEN: You may. 

MS. GLUCKSTEIN: Forgive me that I am somewhat 
naive in our legislative process. 

When somebody is held on the Floor, what does that 
bean, and what guarantee does that give to us that we will be 
able to come to some fair agreement? 

SENATOR CRAVEN: It has really only one 
relationship, and that is the passage of time. To hold some 
nomination or nominee on the Floor, perhaps, or a period of two 
weeks, which I think Senator Roberti mentioned, just allows 
time to take care of those items in which you have greatest 
concern. 

MS. GLUCKSTEIN: So, Senator Craven, in conclusion, 
I just ask in good faith on behalf of so many people that I 
have here today for the record the guarantee of Dr. Molly Coye 
that she will work in her best faith to help all parties come 
to terms with this most serious issue. 

SENATOR CRAVEN: Yes, I'm sure she will be very 
happy to say yes to that. 

DR. COYE: Yes. 

SENATOR CRAVEN: She says yes. 

MS. GLUCKSTEIN: Okay. 

SENATOR CRAVEN: Thank you very much, dear. We 






38 
appreciate it. 

MS. GLUCKSTEIN: Thank you. 

SENATOR MELLO: Mr. Chairman, I'll be, I think, 
pretty brief. 

Mr. Torres has not returned to the room, and 
Dr. Coye, he has submitted me with two sets of questions: one 
dealing with farmworkers, and the other one dealing with 
tobacco use and the health clinics, and so forth. 

Did he provide you with a list of those questions? 

SENATOR CRAVEN: Are these Mr. Torres ' s comments? 

SENATOR MELLO: Yes, he wrote me the letter. He 
asked me at this hearing. 

Mr. Chairman, I'd like to just ask the Sergeant to 
present these questions to Dr. Coye. I'm sure she'd be willing 
to respond to him. 

SENATOR CRAVEN: Very well. 

As I recall, Mr. Torres ' s comments the last time, 
he at least touched, I think, upon those items to which you 
have referred. But if you'll give the Doctor — do you want to 
have a little time to woodshed those? 

DR. COYE: Do you want an answer here, now? 

SENATOR MELLO: He was here earlier, but he left. 

SENATOR CRAVEN: I think he's left, Henry. 

SENATOR MELLO: I think you having it is adequate. 

Now, Mr. Chairman, if I may ask the Sergeant again, 
the Legislative Counsel's letter that was dated May 6th, do you 
have that? It came out this morning. 



39 

DR. COYE: On Ward Valley? 

SENATOR MELLO: Yeah, on Ward Valley. 

DR. COYE: Okay, yes. 

SENATOR MELLO: The letter from Committee to 
Bridge the Gap? 

DR. COYE: No, I don't have that. You mean the 
most recent one from Hirsch? I don't have that. 

SENATOR MELLO: The other one from Hollywood 
Women's Political Committee, a series of letters here that I 
want you to have also. 

What I envision happening in the next — and here's 
a copy of Ms. Gluckstein's statement for your own personal use. 

What I envision happening in the next two weeks, 
then, would be this dialogue to continue. 

The Bridge the Gap, Mr. Dan Hirsch has gone through 
the document that the Department of Health Services is 
proposing, comparing that with what they had sent in their 
memorandum. They find some deficiencies that they would like 
to have resolved prior to the confirmation being confirmed on 
the Senate Floor. 

SENATOR CRAVEN: Let me ask you a question, if I 
may. 

Are you referring to the situation wherein there 
was a presumed meeting of the minds prior to the hearing, 
finalized hearing, on Mr. Gould, where both sides had come 
together to discuss it, and there was, at least in my judgment, 
there was an agreement, which seemed to evaporate rather 



40 

quickly when we had a hearing, because the Ward Valley people, 
if you will, came in and made all kinds of comments. One 
gentleman, very articulate and obviously very knowledgeable, 
kept proffering these various things, and it seemed like the 
Committee — not necessarily Mr. Gould, but the Committee — 
was receptive to what he said in many, many instances. 

Now, that's not to say that everything was resolved 
perfectly. But I think all of the witnesses, and the Senators 
are very well aware of this, you never necessarily are going to 
get everything you want. There has to be some degree of 
compromise somewhere along the line. And I suppose half a loaf 
is better than no loaf at all. 

So, keep that in mind. 

SENATOR MELLO: Mr. Chairman, there's another 
really important factor there, and that is, given that the 
Department of Health Services has a set of standards there. 
The Bridge the Gap people and others have theirs . 

I'm being guided primarily by our own attorneys. 

SENATOR CRAVEN: Yes. 

SENATOR MELLO: Our Legislative Counsel, Eva 
Krotinger, who sat through all of these hearings. The letter 
that she presented to us is her report to us, the Rules 
Committee and the Legislature, and that, I think, is the 
dominant factor, and that is what I want to cover briefly 
today. And I have about four or five questions in this regard 
taken from her own letter, that I'm sure you have a copy of. 

SENATOR CRAVEN: Fine. 






41 

SENATOR MELLO: Okay, the first one is, I 
understand the process as being underway to develop — to 
appoint and select an administrative law judge. 

Has that determination been made, or do you have a 
short list of possible nominees, and what's the status of that 
selection process? 

DR. COYE: We've been working on it very hard, and 
we do intend to — there's been no final decision, and we do 
intend to consult with the Rules Committee before we make a 
selection. 

SENATOR MELLO: Do you have any names of persons 
that you would have available for us at this point so we can 
check them out in the next two weeks? 

DR. COYE: No, I don't have them now, but I'll 
certainly let you know as soon as we have names . We ' ve been 
very aggressively pursuing this, but given our interest in 
trying to make sure we have the best possible candidate within 
the spirit of the what Leg. Counsel has written up here, in 
terms of an independent judge who would be someone that 
everybody would have a great deal of faith in it, it's 
appropriate, I think, to take the amount of time we need to 
come up with a name or names to present to the Rules Committee. 

SENATOR MELLO: Do you expect that to happen in the 
next two weeks? 

DR. COYE: I certainly hope so. 

SENATOR MELLO: Okay, well, we'll be looking to see 
if you do have. 



42 

I think it ' s very important that both sides have a 
chance to analyze the person which will be the administrative 
law judge on this issue to make sure, as pointed out in here, 
they will not a state employee; they will not have a conflict 
of interest. 

DR. COYE: I would like to point out that, again, I 
don't want to appear to just stick with legalities, but the 
attempt is made not to get a state employee. If we can't find 
someone appropriately qualified, willing to do it, who is not a 
state employee, I think — I don't know where it's written in 
here, but my recollection is that the attempt would be made to 
find someone who's not a state employee. And that certainly is 
what we ' re trying to do . 

SENATOR MELLO: Plus, the person, I think, should 
be able to make an independent judgment based on their own 
background, and not having been associated in anyway with 
either side, so the procedure, which I think is very important, 
would be done very impartially. 

Is that what you hope to accomplish? 

DR. COYE: Yes, that's clearly what we would 
intend . 

SENATOR MELLO: Another part of this, Mr. Chairman, 
I am not going by any other document than the Legislative 
Counsel, so I'm trying — 

SENATOR CRAVEN: I understand. 

SENATOR MELLO: The attorneys for the Legislature. 

The second point being that also to be appointed 



43 

as administrative law judge will be a scientific advisor to the 
ALJ. I think that's an important position. 

Will that person also — will you also consult with 
us on the appointment of this scientific advisor? 

DR. COYE: I don't — I'm not familiar with that. 
I know about the science advisor, but I don't know if there was 
an agreement about consulting on that. 

Can you point? 

SENATOR MELLO: Do you have a copy of the 
Legislative Counsel's letter? 

DR. COYE: Yes. 

We certainly would be comfortable — 

SENATOR MELLO: It's on page two, the last — 
second-to-the-last sentence: 

"Simultaneously, an ALJ, and a 
scientific advisor to the ALJ, will 
be appointed to preside at the 
hearing. " 

The point that comes to mind is where the 
administrative law judge would be one operating on the 
adjudicatory basis, where the scientific advisor would be one 
to offer advice, I guess, to the judge based on the scientific 
knowledge that they would have of this matter. 

DR. COYE: Right. We'd certainly be glad to submit 
the name to the Rules Committee for consultation. 

SENATOR MELLO: You will, okay. I think that's 
important, because the scientific advisor, having a knowledge 






44 

of low level radioactive waste, could even be more influencing 
on a decision to the judge than the judge having his own 
opinion of this matter. So, I think both of them become very 
important, from my perspective. 

I'm happy that you will submit, then, the names 
both of the administrative law judge and the scientific 
advisor. 

She nods her head affirmatively, Mr. Chairman. I'm 
hoping that our transcriber can place in the notes that the — 

DR. COYE: I think I stated in a full sentence a 
minute ago. 

SENATOR MELLO: Okay, thank you. 

Another important thing, we talk about the hearing 
to commence at a certain time. There's nothing mentioned about 
the location of the hearing. 

I think this is important, because if it's located 
in Ward Valley, or in Modoc County, or somewhere, I would hope 
that we could reach agreement that the hearing will be located 
in an area accessible to the general public of California. 
Namely, comes to mind an area like Los Angeles, or San 
Francisco, Sacramento, where you have airport services 
convenient so that people can have access. 

If it's located in a far removed area, this might 
serve as a impairment for having people attend these hearings . 

SENATOR CRAVEN: How about Merced? That's in the 
middle of the state. 

SENATOR MELLO: Merced, yeah, that's what I'm 



45 



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aying. 

SENATOR CRAVEN: They'd probably be very happy to 
lave anything down in Merced. 

[Laughter. ] 

SENATOR MELLO: Well, I heard Stan Statham talking 
about his 51st state today, he says nobody wants Bakers field in 
heir state. 

[Laughter. ] 

SENATOR CRAVEN: That's a shame. 

SENATOR MELLO: Do you see what I'm saying, 
Dr. Coye? 

DR. COYE: Yes, I would certainly in the next 
couple of weeks as a part of the discussion be glad to discuss 
this. I haven't had any discussion with my staff about it. I 
don't know what other considerations might come to bear, but I 
assure you, our intent would be to try and assure maximum 
public access and participation. 

SENATOR MELLO: That would include air travel, 
hotel accommodations, convenience, so that people can — 

DR. COYE: Oh, convenience. I thought you meant 
paying for it . Yes . 

SENATOR MELLO: No, no, no, not paying. I mean, 
many have come up here to these hearings at their own expense. 

So, that's going to be your goal, to have it 
accessible by putting it in an area — 

DR. COYE: Yes. 

SENATOR MELLO: All right. The answer to that was 



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There are some statements here that perhaps my 
colleagues, Senators Petris and Beverly, would understand 
jbetter than I, and that is whether or not — well, the 
adjudicatory hearing will be held, but then the decision that 
you make will include not only the evidence before the 
administrative law judge, but also evidence that were in 
previous hearings during the Environmental Impact Report and 
other hearings that were held. 

Now the question is, and the reason I ask the 
question, I understand that testimony given before the 

Environment Impact hearings under CEQA were not under oath. So 

i 

therefore, there might be statements made there that would be 

of influence to the adjudicatory hearings that were made by 

people while not under oath, and while the adjudicatory 

hearing, as I understand, will be under oath and be subject to 

cross examination. 

So, I think the credibility of the evidence is what 
I'm trying to get to. Under the adjudicatory hearing, it'll be 
under a different basis, and have a higher standard of 
credibility than those that were just taken before the CEQA. 

I want to get some response from you, how will you, 
as a person faced with this decision, how will you give weight 
to the testimony given at all the hearings versus just the 
matters of evidence before the adjudicatory hearing? 

DR. COYE: Well, I certainly will look at the 
qualifications of people who speak, the circumstances under 



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47 
Which they speak, such as oath or not. Their personal interest 

jin the matters that are being brought before them, the matters 

i 

(that they're commenting on, a wide range of issues. 

I 

I would not be blind to the issues that you're 
aising. 

SENATOR MELLO: Let me ask you this. If there's 
testimony in the Environmental Impact Report that appears to be 
relevant to the hearing before the administrative law judge, 
would you favor bringing these persons back in before the 
adjudicatory process, and then put them under oath to make 
their statements under oath? 

DR. COYE: Not necessarily, unless I had reason to 

be concerned about their credibility. 
i 

Certainly, other parties of interest can request 

the judge to have them brought forward, but as an a priori 

assumption, I would not suggest that everything that was 

offered in the EIR would need to be brought back for 

repetition. 

SENATOR MELLO: At this point, all of the testimony 
was before all of the hearings that have been held prior to 
today, before CEQA and Environmental Impact Reports, and those 
are part of the record that you have under consideration? 

DR. COYE: Uh-huh. 

SENATOR MELLO: I think it's important to make sure 
that your decision finally will bear the weight of the evidence 
before the administrative law judge, and are backed up by 
credible witnesses that are offering testimony that are, in 



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48 






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fact, factual. 

DR . COYE : I agree . I think it ' s important . 

SENATOR MELLO: Another comment made on page four, 
now, of the Legislative Counsel's report. They say on Roman 
(Numeral I, "STATEMENT OF PRINCIPLES FOR AN ADJUDICATORY 
HEARING": 

"There is a commitment to 
maintaining the openness of this 
process in a way that allows for the 
full airing of outstanding 
scientific issues." 

Now, we talked about safety issues as well, and I 
think it's important that they not merely be scientific issues, 
but they be those issues concerning safety. 

DR. COYE: Senator Mello, I'd like to suggest on 
this, I know that there's a wording somewhere else about how 
matters that will be taken up are scientific and safety, or 
something like this. 

This document was crafted carefully by Leg. Counsel 
after hearing from both of the sides involved. And I'm not a 
lawyer. And the reason why particular phrases were used in 
particular areas is something that I don't think that I should 
independently try to change or comment on here. 

I have a great deal of faith in what Leg. Counsel 
came out with and will attempt to honor it in spirit as well as 
in the technical letter of what is actually written. 

I would suggest that in the discussions over the 



49 



next two weeks, that what that means could be clarified by Leg. 
Counsel, or Leg. Counsel and our — and Secretary Gould's 
lawyers . 

But I really don't want to try and amend this or 
further explain it. 

SENATOR MELLO: Well, let me ask you your own 
philosophy then. 

Do you agree that the openness of this process 
under the administrative law judge should include the full 
airing of scientific and safety issues? Or do you want to 
limit it to just scientific issues? 

DR. COYE: I'm not sure what would be implied in 
this highly — you know, in all of this wording by saying 
scientific and safety here. There was a whole discussion that 
took place in Secretary Gould's hearings around that, and I am 
not certain why Leg. Counsel themselves used this phrasing. I 
would prefer to talk to Leg. Counsel and understand their 
rationale. 

MS. MICHEL: Senator Mello, the "Statement of 
Principles" is not Leg. Counsel's language. It is the Agency's 
language that was incorporated into it just as an addendum, as 
I see it, that you initially proposed. The rest of the 
document is Leg. Counsel. They incorporated that. This is not 
the legal format, the "Statement of Principles". 

DR. COYE: Okay. 

SENATOR MELLO: The reason I raised the point, I 
think we can have a full hearing on the scientific issues 



50 



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[involved, so we can agree on the scientific part of this 
broposal, but it may be unsafe. 

DR. COYE: The thing that's very important here, 
because this negotiation was between the Committee and 
Secretary Gould, I will be consulting very closely with 
Secretary Gould in the actual implementation of the agreement. 

I'm not prepared independently, here, to alter or 
change what we're saying. 

I will make the personal commitment to you that 
What is agreed to between the Rules Committee and Secretary 

Sould and the lawyers working for myself and Secretary Gould 

i 

over the next two weeks will be what I implement in full faith. 

But I am not prepared to change the wording which 
Secretary Gould has offered to the Committee at this point. 

SENATOR MELLO: You're saying we're going to be 
bound just by Secretary Gould's lawyers and not involved with 
lawyers from the Senate? 

DR. COYE: No, I said between the Committee and the 
Agency . 

SENATOR MELLO: All right. Well, I hope that we 
can — I think safety is more important than scientific aspects 
of this whole hearing, because whatever scientific knowledge 
might be available is one thing, but if we leave out safety, 
we ' re leaving out probably the biggest challenge that — or it 
may not be a vital issue. 

Okay, another issue on that same page. As 
Ms. Michel points out, these are "Statement of Principles" from 



51 



your Department that, I think, are very limited. 



Roman Numeral III: 

"The process must be based on, and 
consistent with, existing state law 
and not create new legal issues that 
will only give rise to subsequent 
challenges. " 

I think we're leaving out an important part there, 
because most of the laws relating to nuclear energy, both high 
and low level, are under federal law and the Nuclear Regulatory 
Commission, the NRC. 

So, I think what you're trying to do here is limit 
the scope to only state law, which is pretty much is limited by 
CEQA, rather than meet the standard that governs us all on the 
federal basis and the Nuclear Regulatory Commission. 

DR. COYE: Yes. Again, I would say that this was a 
Statement of Principles offered by Secretary Gould in response 
to negotiations that he conducted with the Committee . 

I'm not in a position to alter or change what has 
been submitted to the Committee. I certainly will convey your 
concerns back to Secretary Gould, and during this next two 
weeks, there'll be an opportunity to work it out, apparently. 

But my sense is that there was, you know, a great 
deal of thought and effort that went into this on the part of 
both our staff, myself, and the Secretary. And I would prefer 
to wait rather than offering any amendments at this point. 

SENATOR MELLO: Yeah, I understand your position. 



52 

You're not saying that you can speak on behalf of the 
2 

iSecretary. 

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alking with feel this is very important, that the laws 
governing the state and federal government and the Nuclear 
Regulatory Commission be the laws by which the process be based 
on, and not be limited just to state law, which I think would 
just about negate any issues governed under federal law. 

SENATOR CRAVEN: May I just interject, Senator 
Mello? 

Correct on this if I'm wrong, isn't it fair to 
assume that we adopt by reference federal law as it pertains to 
the subject matter, and that we still have certain latitude 
within state law, and our own operation, to exceed from the 
standpoint of stringent quality that which the feds may have 
enacted? 

SENATOR MELLO: That says something to me more 
jsatisfying than what's here, because here it makes no reference 
jto the federal law that really pre-empts state law in most 
cases . 

DR. COYE: I really, since this was negotiated by 
Secretary Gould and the Committee, I'd be much more comfortable 
going back and consulting with him. 

SENATOR CRAVEN: I understand that, Doctor. 
Senator Mello does, too. 

SENATOR MELLO: I'm raising the issue because in 
the next two weeks , Senator Roberti ' s indicated he ' s going to 



53 

designate some of his staff. I hope to be involved to the 
jextend I can and others, so that finally, I hope that we have 
Jan agreement that everybody's happy with, or unhappy slightly 

ith, but something that we can move forward in a very credible 
way, getting all the information before us. 

Now, the final one, Mr. Chairman, and I know you're 
going to start applauding, but hold your applause until I get 
through . 

This is the timing. Roman Numeral IV says: 
"In the interest of assuring that 
any final decision reflects all 
available information, there will be 
no licensing decision until the 
completion of the adjudicatory 
hearing process." 
That's fine. The thing that comes to mind is, 
there should be somewhere, I think, what an adjudicatory 
hearing — it's not clear in my mind whether — I know you make 
the decision, so I guess the adjudicatory is closed. The case 
is terminated at that point. Information is brought to you. 

I think that there should be a period of time, 
maybe 30 days, by which people may want to appeal. Your 
decision not be made firm in place until the 30-day period. 

I don't know what the existing law would call for, 
because — and I don't know even there might be an appeal even 
after you made your final decision. 

I'm just searching to see whether or not there is a 



54 

period of time which you can announce your decision to be 
effective. Like, if you made it today, maybe it would be 
effective June the 6th. That's how referendums are made at the 
county level. They're effective in 30 days. During that 
30-day period, you have an ability to file a protest or file an 
appeal action, or something, at that point. 

DR. COYE: Again, I think this is in the same 
category as the other items . 

I understand your concern, and I will certainly 
both consider it myself and refer it back to Secretary — take 
it back to Secretary Gould, but it would be a substantive 
addition to the text of what Secretary Gould has prepared and 
what Leg. Counsel has prepared. Therefore, it is different. 

I think this is in the technical body of what Leg. 
Counsel represents is the agreement between the Rules Committee 
nd Secretary Gould. So therefore, I would be very reluctant 
o offer any changes in that, but I would suggest it could be 
addressed in the next two weeks . 

SENATOR MELLO: Well, I appreciate your statement 
here. 

You're testifying that there appears to be 
agreement in the text from your Department and from the Bridge 
the Gap and others . 

DR. COYE: No, I'm sorry. I meant — excuse me. I 
meant agreement between the Secretary Gould and our staff in 
the Agency, and the Senate Rules Committee, and Leg. Counsel. 
I'm not sure, you know, on which issues we will come to 



55 
agreement with the Committee to Bridge the Gap. 

SENATOR MELLO: I think the way that, at least my 
understanding, that we're proceeding on is, we've had several 
[transcripts of all the hearings, and statements that you made 
and Mr. Gould have made are all part of the transcripts. 

Leg. Counsel has then gone through them, trying to 
pick out the testimony from Bridge the Gap and other groups, 
trying to bring those into context so that this agreement, 
then, can be finalized. 

At this point, based on Leg. Counsel, let me ask 
Nancy Michel, if I may, the position of Leg. Counsel that was 
indicated to me yesterday is that the last memorandum of 
agreement that your Department has put forth does not meet the 
parameters of the agreement that was testified to here before 
the Committee, and Eva Krotinger indicated she needed more time 
o bring this together. 

MS. MICHEL: I think at this point what we have 
from Leg. Counsel is their belief of what the agreement was. 

DR. COYE: And we've accepted that. 

SENATOR MELLO: But have they indicated that it 
does meet what was agreed to? 

MS. MICHEL: That is my understanding of their 
representation . 

They acknowledge that there are open issues, but 
those were not issues that were part of the Rules Committee 
hearing. 

SENATOR MELLO: Okay. 



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56 

Well, Mr. Chairman, thank you. I tried to be brief 
enough, but I did want to get these out, and I do hope that in 
the next two weeks, we can work towards bringing these issues 
together . 

I think it's a very important issue, and I just 
think that the use of nuclear energy and the disposal of waste, 
whether it be low level or high level, and the accumulation 
thereof, has such a threat to the planet and society, we have 
to take every precaution that we don't endanger safety. That's 
why I brought up that point about safety, and that we protect 
the planet Earth as well as the people's health, and not 
endanger the resources that we have here. 

And I see that nuclear energy is one of the 
greatest threats we have if we don't manage it under very 
extreme, cautious conditions. That's why I think this issue 
becomes very important. 

SENATOR CRAVEN: Very good. Thank you, Henry, for 
adhering to that which you told us you were going to pursue, 
and you did it as succinctly as possible. 

I think all of the Members of the Committee, as 
well as those persons in the audience who have a great interest 
in this issue, are very appreciative of the introspective 
manner in which you've handled yourself in your questions 
during this period of time, which is at time trying, but I 
think I'm beginning to see the light at the end of the tunnel. 

Senator Petris, do you have anything further? 

SENATOR PETRIS: On this issue, no. 



57 

SENATOR CRAVEN: That's good. 

Senator Beverly. 

SENATOR BEVERLY: Just one comment. 

This may go on forever, but one thing we're 
overlooking. The witness and the nominee took an oath of 
office to uphold the laws of the State of California, and the 
Constitution, and the U.S. laws as well. 

SENATOR CRAVEN: Yes. 

SENATOR BEVERLY: She's a woman of integrity and 
good judgment, and I think we can presume she'll act 
accordingly. 

Move we lift the call and call the roll. 

SENATOR PETRIS: Before you call the roll, I'm 
going to abstain until we see what develops in the next two 
weeks. I'm going to forego any vote until we get to the Floor. 

And we're going to have a meeting in the meantime. 

SENATOR CRAVEN: Very good. 

There being no further questions, call the roll, 
please. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. Senator Petris. Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. 

And Senator Robert i had already voted Aye, so the 
vote is three to zero. 



58 

SENATOR CRAVEN: Three-zero; the nomination is 
moved to the Floor. 

You didn't even have a chance to say anything; did 
you? 

DR. COYE: That's all right. Thank you. 

SENATOR CRAVEN: You might say Amen. 

You're welcome, Molly. Thank you very much. 

Thank you, all of those of you who came to the 
hearing, not only this but the others. We appreciate your 

[[intense interest and the testimony which you have delivered. 

I 

All right, let's go next to appointees, Octavia 

l? 

Diener, Member, California Transportation Commission. 

MS. MICHEL: I think Senator Kopp wanted to be 
here. 

SENATOR CRAVEN: Did I pronounce your name 
correctly? 



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MS. DIENER: You're pretty close: Deener. 

SENATOR CRAVEN: I was going to say that, then I 
thought, well, i-e-, I don't know. 

Ms. Diener, we ask all of the nominees to tell us 
why they feel that they are competent for that positions to 
which they have been nominated. 

MS. DIENER: Thank you. 

I served on the Fresno City Planning Commission for 
several years and chaired that Commission for two years. I 
also have been very involved with the Economic Development 
Corporation and chaired that board for two years, and also with 



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59 
our local Chamber of Commerce and worked with their 
Transportation Department. 

So basically, my interest in transportation has 
stemmed probably more from land use planning, and I have seen 
transportation from the land use planning area. 

SENATOR CRAVEN: Yes. 

Do either of the Senators have any question of the 
nominee? Senator Beverly has none. 

Senator Petris, do you? 

SENATOR PETRIS: Yes. 

I'm only going to go into one area, and that is the 
Amtrak new train from San Jose all the way up to here and back. 

I've had complaints from people riding that train 
that since the policy was changed — they apparently removed 
one car, which was a smoking car — so now they allow smoking 
in the other cars in the first five rows, and that doesn't 
work. It seems to me that's in violation of our statute which 
says you can't do that. 

Are you aware of that problem? 

MS. DIENER: No, I'm not. I would have to take 
that back to our full Commission. 

SENATOR PETRIS: I wish you would. I think it's 
very important. A lot of riders have been discouraged by the 
increase in the fare. The original reaction has been 
fantastic, thousands of riders. But I understand that's been 
very substantially cut back since the amount was changed, so we 
don't want to discourage any more than we have to. 



I 



60 

MS. DIENER: I think we're having a rail 

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renaissance. 
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SENATOR PETRIS: Yeah, well, I hope so. It 

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certainly looked like one when it first started. 

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Anyway, I would appreciate it if you'd take that 
6 

back to the Commission and serve notice on the people who are 

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running that trains that maybe they need more signs. I don't 

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know if they have any signs, actually. 

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MS. DIENER: I have taken Amtrak before, but I'm a 

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nonsmoker . 

SENATOR PETRIS: Well, they wouldn't have signs if 

they allow smoking in the first five rows. And we found out in 

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the past it doesn't work, any more than it did in the airplane. 

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The smoke always seemed to blow in the direction of the 
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nonsmokers, no matter which way the airplane was going. 

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[Laughter. ] 
SENATOR PETRIS: And even now on the trains, when 



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they can't open the windows, it still seems to be a problem. 

MS. DIENER: Senator Petris, I'd be happy to take 
your comments to the full Commission. 

SENATOR PETRIS: Do you have any information on the 
fare? What's the current ridership compared to the early 
weeks? 

MS. DIENER: I know it's been very good, but I 
don't think we've had — we've not had an update currently, but 
it has been very good. 

SENATOR PETRIS: Maybe the Director would know. 



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I'll have to ask him. 

But I was overjoyed with the results that I heard 
originally. I know some people who come up from the Bay Area 
on Sundays, and go into Old Town, and maybe even go to the 
Railroad Museum, you know, families, and then they go back. 
So, there's been a tremendous success so far. 

MS. DIENER: Now we need to complete the links. 

SENATOR PETRIS: Pardon me? 

MS. DIENER: We need to complete some of the links 
also. 

SENATOR PETRIS: Right. Thank you. 

SENATOR CRAVEN: Is there anyone in the audience 
who wishes to testify on behalf of the nominee? Anyone in 
opposition? There appears to be none. 

SENATOR BEVERLY: Move we recommend approval of the 
confirmation. 

CHAIRMAN ROBERTI: Senator Beverly moves. 

Call the roll, please. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. Senator Petris . 

SENATOR PETRIS: Aye. 



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SECRETARY WEBB: Petris Aye. 

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Senator Craven. 

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SENATOR CRAVEN: Aye. 

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SECRETARY WEBB: Craven Aye. 

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62 
Senator Roberti. 

SENATOR CRAVEN: The measure is out three- zero. 
Congratulations . 

SECRETARY WEBB: Senator Mello had asked to hold 
the roll open. 

SENATOR CRAVEN: That's right, I'm sorry. We'll 
,! leave it open and you'll get another vote. 
MS. DIENER: Thank you. 

SENATOR CRAVEN: You're entirely welcome. 
[Thereupon the Rules Committee 
acted upon legislative items 
on the agenda . ] 

SENATOR CRAVEN: Let's go back to the nominees, 

ji 
Louis W. Barnett, Member of the Unemployment Insurance Appeals 

Board. 

Mr. Barnett, if you would, tell us why you feel 

ji 

you're qualified. 

MR. BARNETT: Senator, first if I might say, it's a 
pleasure to see several old acquaintances, yourself and Senator 
Beverly, and have the opportunity to make a new acquaintance in 
Senator Petris . 

There's several reasons why I would feel qualified 
for the position. The first reason is the extent and breadth 
of my past government service, including local, state and 
federal government . 

The second reason would my interest in and 
involvement with various public policy issues over the years. 



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63 

Thirdly would be the fact that I have served, I 
believe, effectively on the Board for the past 11 months, 
filling an expired term. 

The fourth reason would be that the Chairman of the 
Board has appointed me as Vice Chairman, I believe in 
recognition of my understanding of the Board's operations and 
my leadership on the Board. 

The fifth reason would be after 11 months of 
service on the Board, the Governor has seen fit to reappoint 
me. 

Thank you. 

SENATOR CRAVEN: Very well, thank you very much. 

Senator Petris . 

SENATOR PETRIS: As Vice Chairman of that 
committee, are you going to be able to hire more judges? 

MR. BARNETT: We are consistently hiring more 
judges. Yesterday's Board meeting, we extended offers, I 
believe, to four additional individuals to be hired as 
administrative law judges. We have previously interviewed 
these people, found them competent. They have tested and 
expressed an interest. We will are hopeful that they will 
accept the offer. 

Within the last year, we have hired over a hundred 
administrative law judges at the Agency, most of which are on a 
temporary basis. 

SENATOR PETRIS: Why are they temporary? For the 
catching up? 



MR. BARNETT: To catch up with the backlog that we 

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have, and also as temporary hiring authority that we asked for, 
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we do anticipate the recession will end at some point, and we 

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hope that the caseload will go down. 

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SENATOR PETRIS: How many vacancies are there, or 

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jmuch short of the goal are you? 

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I understand, wasn't there litigation on this 
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Jibe hired by a certain date? But I don't remember those 
t ; numbers . 

MR. BARNETT: Well, I think the reason you don't 

remember the numbers, Senator, it did not get to the point of 

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litigation. There has been extensive discussion between 
Chairman Harvey, and representing the Board at our side, and 
through our Chief Counsel, Mr. McArdle, who is here today, and 
rCRLA, and some of the other firms that have indicated an 
interest in pursuing this . 

We have been in constant contact and we have been, 
I think you can appreciate, shooting at a moving target in 
terms of the backlog. Our projections are based upon the 
projections of the Employment Development Department, and a 
certain percentage of those will come up on appeals. As they 
have — their projections have been exceeded by the actual 
caseload, our caseload has been higher, we have constantly been 
increasing our target for the number of judges to be hired. 

We are probably internally now looking at a higher 
number than we have indicated previously to CRLA will be 



65 

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needed. We've received certain indications of authority and 
2 

flexibility from the Department of Personnel Administration and 

other state agencies just within the last couple of weeks, 

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where we will be able to bring — make greater use of the 

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existing inventory of judges we have, as well as bring on 
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people from other departments. 



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We still have in our mind now a target of 
additional judges to be hired. We have within our mind a 
target of making offers within the next month and bringing them 
on the following month, having them trained in the month of 
iJune, and having them start effective July 1st. 

But that actual target, Senator, will depend upon a 

number of the other offers — will depend upon the number of 

'iother offers of help that have been made. DPA allows us some 
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flexibility on compensating time off. Depending upon how 

"effective a tool that is in getting our existing judges to 

carry a greater caseload, we'll need fewer additional hires. 

We've had indications from the Governor's Office 

that we can expect some loan personnel, maybe, from other 

agencies. To the extent that we have loaned state personnel, 

that will reduce our need to hire additional judges. 

I'm trying to be specific, Senator, in responding 

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to your question, and be as factual as I can, and not obfuscate 
the obvious . 

SENATOR PETRIS: What is their salary? 

MR. BARNETT: The — 

SENATOR PETRIS: Starting salary? 



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MR. BARNETT: The starting salary would be 79,000. 

SENATOR PETRIS: Are you have trouble recruiting 
people? 

MR. BARNETT: The — we are having some problems 
hiring people. I think the largest impediment we have, 
Senator, would be that we're offering jobs on a temporary 
basis. 

SENATOR PETRIS: Have the new hundred judges so far 
been able to reduce the backlog? 

MR. BARNETT: I think the right answer there, 
Senator, is, they've been able to reduce the old backlog, but 
they haven't been able to reduce the new backlog. 

SENATOR PETRIS: You have a new one and an old one? 

MR. BARNETT: Well, the number of registrations of 
appeals we get every month has continued to climb. The 
Employment Development Department estimated that there would be 
a decrease, or a leveling off, at least, of appeals this year. 

In the first two months, I think we exceeded their estimate for 

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the quarter. 

Last month was higher than the month before. We 
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continually see an increase. 

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Internally, we are now projecting our future 

caseload basically on the basis of an annualized figure of the 

worst month we've had yet. 

SENATOR PETRIS: Are most of the appeals by 
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employees whose claims have been rejected or denied? 

MR. BARNETT: Mostly by claimants, yes. 



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SENATOR PETRIS: Have you had any estimate — I 
realize these judges we're talking about are not at your level. 
You're on the appellate level, so it's the trial level which 
we're concerned about. That's where the jam is. 

MR. BARNETT: Right. That's principally correct. 
We do have some Board authors that worked at the appellate 
level, and we've been hiring at that level. And we anticipate 
and project that we will be hiring additional administrative 
law judges at the Board level as well. 

SENATOR PETRIS: Do you also need other personnel, 
clerks — 

MR. BARNETT: Yes. 

SENATOR PETRIS: — to process the petitions and so 
forth? 

MR. BARNETT: Yes, we do, and we have been hiring a 
— in excess of on a one-to-one basis. 

SENATOR PETRIS: Every judge has at least one 
clerk; correct? 

MR. BARNETT: Not — that is the effect, but it's 
on a pool basis really. 

I should note that in addition to simply increasing 
the number of administrative law judges, we're attempting to 
introduce efficiencies. We have new computer systems that are 
being implemented in the offices right now. We have requests 
out for some lap tops, and we're looking for productivity 
tools so that we can get more work out of the existing judges, 
again, increase their effectiveness, and not just throw more 



68 
people at it. 

And Senator, speaking on behalf of the Chairman, 
Mr. Harvey, and myself, either one of us or both of us would be 
very happy to come over and give either you or your staff an 
in-depth briefing on any of these issues that remain. 

SENATOR PETRI S: Thank you. 

They usually express the backlog in terms of shelf 
feet. Do you know what it is now in the average office? 

MR. BARNETT: I would — I would have trouble — 
there is no average office. We have some offices that are 
experiencing a very short backlog, and then we have areas like 
Van Nuys and inland that are just staggering. 

SENATOR PETRIS: Van Nuys has had a problem for 
long, long time. 

MR. BARNETT: Yes, sir. 

SENATOR PETRIS: Why is that such a problem? They 
have fewer judges there? 

MR. BARNETT: No. The inventory continues to 
increase as claims are registered, which are in excess of what 
we had estimated. We've had problems at Van Nuys with physical 
space. 

I think you can appreciate that while the state has 



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that you can pour into that amount of square feet. 

Van Nuys has had to institute a work-at-home 



69 
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program, where clerical support staff has been doing work at 

2 

home and bringing it to the office because we haven't had the 
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space in the office for them. We have attempted to physically 

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modify the office so that we could accommodate more people 

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there. It is on state building, in a state building, and 

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there's no additional space available in that building. 
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We've attempted to address the hearing room problem 

by holding hearings off site, and using the space that was 



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there principally for the administrative law judges and support 
staff. 

SENATOR CRAVEN: I think you may remember also, one 
|of the problem was, they didn't have a clock. 

SENATOR PETRIS: Yes, that was one of the problems. 

Do you have a clock now? 

SENATOR CRAVEN: He probably doesn't know what 
we ' re talking about . 

We went through this thing, and they were talking 
about, you know, we have 97 feet of unopened mail, and so 

forth. And then one of the people got up; he was one of the 

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people in the program, a judge or whatever, and he said one of 
the problems was, they didn't have a clock. And we go, well, 
that's very, very interesting. Maybe they figured out a way to 
use that clock to measure the footage of those things, so this 
fellow here would then know how many feet you've got on the 
ground, or too many. 

It ' s a horrendous problem. This Committee's very 
aware of it. We've had some rather exhaustive hearings along 



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that line, and I, for one, am very impressed with your 
responses . 

SENATOR PETRIS: I have two more. 

What is the principal reason for denial of the 

original petition as it comes up to you? Is there any one 

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^category? 

MR. BARNETT: Denial of the petition, if you could 
be a little more specific. The principal reason why somebody 
would appeal? 

SENATOR PETRIS: Yes. 

MR. BARNETT: I think the major reason would be the 
denial of benefits by the lower authority hearing judge. That 
is, a — 

SENATOR PETRIS: Based on what, ineligibility? 

J 

MR. BARNETT: The principal reason for denial would 

be probably misconduct. That is, they did something that was 

considered misconduct, not in the lay sense, but they did 

: something that would constitute misconduct under the 

unemployment code. 

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SENATOR PETRIS: At least that's the most common 
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base of appeal? 

MR. BARNETT: I would say, yes, but not necessarily 

the majority of cases, but the most common of all the cases. 

SENATOR PETRIS: Do you know low long it takes now 

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for a claim to be processed from the time it's filed until 

i! conclusion? 

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MR. BARNETT: I think that we have seen some claims 



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on federal extended benefits that have been filed, a 
determination made by the Employment Development Department, 
hearing in the field, and they have been up to us already 
within, I would think, three months. Would that be correct? 
Yes. 

On the other hand, at the outside, we would have, 
! frankly , tax cases that have probably been sitting around 
longer than you might like me to go on record about. 

SENATOR PETRIS: Well, that's what I want to know. 

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MR. BARNETT: About, maybe, two years; probably two 
years. The tax cases — 

SENATOR PETRIS: Now, the tax cases are appealed by 

the employer, probably. 

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MR. BARNETT: Yes, those would be by the employer. 
SENATOR PETRIS: On the longer cases involved the 
employee, what happens to the employee during this appeal time? 

There's no other source of income, is there? 

i 

MR. BARNETT: Well, that would depend upon the 

individual. By the time they get up to us, and on behalf of 

the Board, our position is it's taking far too long for a final 

resolution. But by the time we see them, they may well have a 

job; they may be involved in self employment. They may have 

been accepted for Workmen's Comp., state disability, or 

(Something other than unemployment. 

SENATOR PETRIS: Are any of them on welfare? 

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MR. BARNETT: Oh, yes, I'm certain that there are a 

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number . 



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SENATOR PETRIS: Do you know what percentage? 
MR. BARNETT: No, Senator, and I would not even 
venture a guess. That's not a question we ask of them in the 

hearing. We do ask things like have they been able to obtain 

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employment yet, and we get a sense of those issues. 

SENATOR PETRIS: Well, I'm asking it as a budget 
question from this end. There are some, but you don't know how 
expensive it is. 

MR. BARNETT: No, I would not want to venture a 
guess. I would have no basis to give you a good guess on that 
one. 

I would note in passing, though, that we have found 
that the insured unemployment rate — that is , those cases that 
involve paying out of the fund — that rate is higher, even 
though state employment has gone up, or state unemployment has 
gone down. That is probably so because of the extended 
benefits program, and people who would have rolled off the 
program have been able to stay on the program. 

And secondly, we have noted that the length of the 
claims seems to be longer, again reflecting just the general 
newspaper articles that there's a problem out there that a lot 
of people are unemployed and being — and are having trouble 
finding jobs. 

SENATOR PETRIS: Apart from this long delay, I 
don't think any of us likes this long delay, do you think it's 
basically a fair system? And if not, do you have any 
recommendations to us, things that we should do as a 



73 

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Legislature to improve it? 
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MR. BARNETT: First, Senator, I would indicate that 

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my position is s fairly administrative and judicial position 
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and not a public policy position. 
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Secondly, I would indicate that I haven't thought 

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about that, but I'm a relatively opinionated person, and if I 

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spent any time at it, I'd probably have some suggestions. 



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The third thing that I would say very specifically 
right now is that inasmuch as our caseload goes up and down 
radically with the turns in the economy that cannot be dictated 
by the State Legislature, and this is probably going to get me 
in Dutch with somebody, we probably need greater flexibility 
built into the law with regard to hiring, renting facilities, 
and things of that nature, so that when we do get hit with a 
big shock on unemployment going up, or conversely, when the 
numbers come down, there's the potential of a wind sheer 
factor, where our funds come in on the basis of the caseload. 
If that goes down, and we're still hiring and renting office 
space, we could get hurt real bad. 

SENATOR PETRIS: So you need more flexibility. 

MR. BARNETT: That would be the thing I would give 
you, give you off the top of my head right now. 

SENATOR PETRIS: Do you think that could be done 
with a change in the law? 

MR. BARNETT: Absolutely. 

SENATOR PETRIS: It can't be done without a change? 

MR. BARNETT: It can, Senator, but pots have to 



74 
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boil over before everybody realizes that that's the one that's 

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boiling over. 
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SENATOR PETRI S: Okay, well, thank you. 

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MR. BARNETT: Thank you, Senator. 
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SENATOR CRAVEN: Very well. 
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Anyone wish to testify on behalf of the candidate 
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or in opposition? There appears to be none. 
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Senator Beverly. 
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SENATOR BEVERLY: Move recommendation to the Floor. 
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SENATOR CRAVEN: Senator Beverly moves. 



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Call the roll, please. 
SECRETARY WEBB: Senator Beverly. 
SENATOR BEVERLY: Aye. 
SECRETARY WEBB: Beverly Aye. 
Senator Mello. 
SENATOR MELLO: Aye. 
SECRETARY WEBB: Mello Aye. 
Senator Petris . 
SENATOR PETRIS: Aye. 
SECRETARY WEBB: Petris Aye. 
Senator Craven. 
SENATOR CRAVEN: Aye. 
SECRETARY WEBB: Craven Aye. 
Senator Roberti. 
Four to zero. 

SENATOR CRAVEN: Measure's out four to zero and to 
the Floor. 



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MR. BARNETT: Thank you, Mr. Chairman. 

SENATOR CRAVEN: Thank you very much. 

Next we have Benjamin J. Hacker. Director of 
Veterans Affairs. 

First we'll take a brief recess. 
[Thereupon a brief recess was taken.] 

SENATOR CRAVEN: We have here as a nominee Admiral 
Benjamin J. Hacker, Director of Veterans Affairs. 

Admiral Hacker, we'll ask you what we ask the other 
nominees, and that is why you feel that you're qualified for 

this position. 

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ADMIRAL HACKER: Yes, sir, Senator. 

I would respond by saying that I've had 30 years of 
Naval service, preceded by about five years' experience in the 
Army and National Guard. 

In the course of my Naval tenure, I've had the 
opportunity to command the Naval Air Station in Brunswick, 
Maine; the Maritime Air and Surveillance Forces in the 
Mediterranean; Commander of the Naval Training Center at San 
Diego and the Naval Base in San Diego have all been a part of 
i my experience. 

I would conclude my comment that — by saying that 
the background and experience, I think, has prepared me to 
serve effectively as an advocate on behalf of veterans of 
|i California. 

SENATOR CRAVEN: Very well. 

Do any of the Senators have any questions of 



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Admiral Hacker? 

SENATOR BEVERLY: How do you feel about the Marine 
Corps, Admiral? 

[Laughter] 

ADMIRAL HACKER: I'm a strong Marine Corps 
supporter, Senator Beverly. 

SENATOR CRAVEN: As a matter of fact, he just came 
over and spoke to me about the Legislative Marine Brigade. 

Is there anyone in the audience who wishes to speak 

in favor or in opposition to this appointee? 

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Yes, ma'am, did you wish to speak? Come to the 

table and state your name, please. 

MS. MANWILLER: I'm Pam Manwiller, and I represent 
State Employed Physicians, Dentists and Podiatrists. 

We want to speak in favor of the Admiral. We've 
gone to him with some concerns from the Veterans Home, and he 
has been very accessible to us . He's listened to us. 

I'd like to tell you, we've gotten every concern 
dealt with. That's not always the reality, but he certainly 
has provided an open door, and is working with the staff to 
meet their needs. 

SENATOR CRAVEN: Very well, thank you very much. 

Anyone else? 

SENATOR PETRIS: May I ask a question? 

SENATOR CRAVEN: Senator Petris . 

SENATOR CRAVEN: What's the name of your group? 



77 
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MS. MANWILLER: The Union of American Physicians 

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and Dentists . 

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SENATOR PETRIS: Now I understand from your group 

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that at one time, there was a communication problem. Has that 

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ibeen resolved? 

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MS. MANWILLER: There has been, and it has been 
resolved. And I feel like that's why we're here in support of 



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the Admiral. He has provided accessibility, and there's always 
ongoing issues, but I think that he's given us a lot of access 
to his office. 

SENATOR PETRIS: Okay, that's fine. 

Thank you. 

SENATOR CRAVEN: Good to hear. 

Senator Beverly. 

SENATOR BEVERLY: Move approval of the nomination. 

SENATOR CRAVEN: Senator Beverly moves. 

Call the roll, please. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. 



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SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. 

Senator Roberti. 

Four to zero. 

SENATOR CRAVEN: The measure is to the Floor. 

We thank you, Admiral, for being with us. We're 
Isorry that you didn't have more time to tell us some of your 
exploits, or whatever, but I'm sure you're just as happy. 

ADMIRAL HACKER: Thank you. 

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SENATOR CRAVEN: As they say, it's good to have you 



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Education. 

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aboard. 



Next is Kyong Hwan P. Kim, Member, State Board of 



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Mr. Kim, please sit down. 

MR. KIM: Thank you very much, Mr. Chairman. 

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SENATOR CRAVEN: Tell us why you feel you're 

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qualified, please. 

MR. KIM: Well, I first go by the name Paul. It's 
easier for you. 

Qualified, I guess. It's kind of strange you asked 
me that question, because that's the same question I've been 
wondering about for the last nine months. 

I'm still waiting for a letter from the Governor's 
Office saying: Psych! It was a mistake! 

[Laughter. ] 

MR. KIM: The reason I say that is because of 
friends who — the finalists, two other finalists, who made it 



79 
to the Governor's Office with me. I see them now, and they're 
very qualified. They're very outspoken and so forth. 

But back to the issue of qualification, I guess. I 



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even wrote it down. All right. 

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This summer will be my fifth year in America, fifth 

year in California, I guess. And in that five-year process, I 

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learned about being an immigrant, being an outsider, as well as 

being an insider, being an American, and so forth. I think 

ithat kind of qualifies me as representative of the population 

'iof California, since it's so diverse in everything. 

I guess the second point is, I guess more important 

Ithan the first, is my dedication to the state. California — 
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it's kind of corny to say that, but California education has 

given me a lot, and I think being in this position, being the 

student member on the Board of Education, gives me a chance to 

jjgive something back to the state. And that dedication is one 

of the most important qualifications, I feel, for this 

|| position. 

SENATOR CRAVEN: Very good. Thank you very much. 

Senator Petris . 

SENATOR PETRIS: Who was Grace M. Davis? 

MR. KIM: As I understand it, she was a very active 
member of the community in Modesto. There's a picture of her 
on the wall at our school. 

I'm not really familiar with what she did, but as I 
understand it, she did a lot for our community. 

SENATOR PETRIS: That's good enough. 



I've noticed that teachers don't get the respect they deserve. 
There are a lot of students out there who don ' t think the 
education's as it should be. It should be a privilege. And 
they get so — it's a great right, and they get — they take it 
[such a granted — excuse me. They take it as if it was 
[granted, and sometimes they abuse it. 

SENATOR PETRIS: How do we change that? 

MR. KIM: With more discipline, I guess. It's 
something in the families. 

I guess the schools are relied as a baby-sitting 
place. They shouldn't be that. They should be a place for 
them to learn. 

I think it goes back to the family structure, where 
parents parents should look at their children again, look at 
them and teach them what morals are really stand for. 

SENATOR PETRIS: Do you get that at home? 

MR. KIM: Yes. I'm really fortunate, I guess. My 
parents have been very supportive. 

SENATOR PETRIS: That's one reason you're a student 
body president. 

MR. KIM: I guess that helps. 

SENATOR PETRIS: Thank you. 



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MR. KIM: Thank you very much. 



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SENATOR CRAVEN: Very good response. 

Senator Mello. 

SENATOR MELLO: Thank you, Mr. Chairman. 

Just out of curiosity, but I'm very interested in 
bilingual education, serving as the Chairman of the Senate 
Select Committee on Bilingual Education. 

It appears that you came here four years ago? 

MR. KIM: Four-and-a-half years ago. 

SENATOR MELLO: And based on this article, you 
could not speak English when you got here. 



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MR. KIM: I guess newspaper articles, the press, 
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has been a little bit not so truthful, I guess. They hid some 

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I lived in Hong Kong for about three years before I 
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i came here, and I picked up a little bit of English there, so I 

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jhad basic structures in English before I came. 

SENATOR MELLO: So I guess what I'm getting at, how 
did you become so proficient in English in such a short period 
of time? 

MR. KIM: I want to give credit to my Dad, Father. 
It was supposed to be, I guess, instead of putting me in the 
ESL class, I was placed in normal English and all that. I 
; think I picked up English faster that way, being — better than 
placed in an ESL setting where I would be taught something 
else. Being in general ed., being in normal classes, I think I 
picked up faster from my friends . 



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SENATOR MELLO: On a personal note, what have you 
chosen to be your career in a more adult life, once you get 
through your college years? 

MR. KIM: Well, I haven't decided. There's so many 
things out there in the world. I haven't seen all of them yet, 
so I'm keeping my options open. 

SENATOR MELLO: Very good. 

I'm always impressed with people who come over here 
and so quickly adapt to the English language. My father was an 
influence on me. He finally said, you know, "We've got to 
speak English. That's what you have to do when you're here." 

I guess you were motivated by your parents as well 
in English. You've done very well. I surely commend you for 
that. 

I just wish you'll have a great career, and I know 
you'll make a real contribution here to California and the 
United States of America. 

MR. KIM: Thank you very much. 

SENATOR MELLO: Thank you. 

SENATOR CRAVEN: Is there anyone in the audience 
who wishes to speak on behalf of the nominee? Anyone in 
opposition? There appears to be none. 

SENATOR BEVERLY: Move approval of the nomination. 

SENATOR CRAVEN: Senator Beverly moves. 

Call the roll, please. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 



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SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. 

Senator Roberti. 

Four to zero. 

SENATOR CRAVEN: The measure is to the Floor. 

Congratulations . 

MR. KIM: Thank you very much. 

SENATOR CRAVEN: Next is James Van Loben Sels, 
Director of Transportation. 

SENATOR KOPP: Mr. Chairman, do you mind if I just 
Itestify quickly, succinctly? 

SENATOR CRAVEN: I don't mind at all, except for 

the fact that Mr. Rollens told me that I had to hold the item 

which you are interested in until we get to another item on the 

agenda . 

SENATOR KOPP: No, I'm interested in this item. 
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SENATOR CRAVEN: Oh, you're interested in this, 

excuse me. I thought you were talking about your waiver. 

SENATOR KOPP: Mr. Chairman, Members of the 



84 
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Committee, I take the time to appear before the Rules Committee 

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in support of the nomination of Mr. James Van Loben Sels as 
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Director of CalTrans . 
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I recommend and ask that you recommend his 



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confirmation unanimously. 

While the Van Loben Sels family is a distinguished 
family in the history of California, particularly Alameda 
County, I never had the pleasure of meeting Mr. Van Loben Sels 
until last fall, after his appointment by the Governor. 

As Chairman of the Transportation Committee of the 
Senate, I have had many discussions, I have had meetings with 
Mr. Van Loben Sels, and of course, correspondence regarding 
issues in California transportation. 

His record obviously speaks for itself, and he will 
speak for himself. 

I want to give you the benefit succinctly of my 
observation that he is competent. He is certainly dedicated to 
public service. He is highly familiar with the fact that his 
responsibility is the stewardship of a department that has 
become, in many ways, an ineffective bureaucracy. It is a 
department with approximately 19,000 employees, and a budget of 
about $6 billion, yet very much needs an overhauling. And I've 
concluded that Mr. Van Loben Sels is the person who can provide 
the leadership for that overhauling. 

So long, Mr. Chairman and Members of the Committee, 
I I add this caveat, so long as he is given fully the opportunity 
to do so. So long that he is not curbed by the Agency or by 



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85 
any other level of state government. Naturally, the 
Legislature has the constitutional obligation of oversight with 
respect to the Department of Transportation, but I am convinced 
that Mr. Van Loben Sels merits confirmation for the reasons 
that I've stated, and because we have much at stake in assuring 
Californians a judicious Director of that department who is 
truly committed to reducing the overhead and to delivering and 
icausing the delivery of the projects for which Californians are 
jpaying extra gasoline tax and higher truck weight fees. 

SENATOR CRAVEN: Thank you very much, Senator. 

Senator Petris. 

SENATOR PETRIS: I think, coming from the 
distinguished Chairman of our Transportation Committee, that 
carries a lot of weight, particularly since there was some 
apprehension in the beginning, before you got to know him, 
about background and qualifications. 

That's been overcome, obviously. 

SENATOR KOPP: It has. 

SENATOR PETRIS: Thank you. 

SENATOR KOPP: Thank you. 

SENATOR CRAVEN: Very good. 

SENATOR MELLO: Mr. Chairman, Senator Kopp 
mentioned his family in Alameda County, but the true origin of 
this great family is Monterey County, where his grandfather, 
and father, himself, and many others, are very familiar with 
the area. I just wanted to add that to your statement. 

SENATOR KOPP: Well, I became familiar with the Van 



86 
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Loben Sels family many years ago in the course of my legal 
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practice, as a matter of fact. 
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I've never even asked Jim, because I can't remember 

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the first name of probably a cousin. 

SENATOR MELLO: That was back in the 1800s. I'm 
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talking about — 

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[Laughter. ] 

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SENATOR KOPP: We're talking about modern 

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jiCalifornia history. 
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SENATOR PETRIS: May I ask a couple questions, 

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;!Mr . Chairman? 

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SENATOR CRAVEN: Well, is this pre-emptory to his 

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statement? 

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SENATOR PETRIS: No, after his statement. 

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SENATOR CRAVEN: Okay. Let us let him make the 

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statement first, certainly. 

It occurs to me, before Mr. Van Loben Sels speaks, 

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'ithat he's the second nominee here today of two-star rank, flag 
jjofficer, served a career in the United States Army with great 
distinction. 

We will ask you, as we have asked others, why you 
feel you are qualified to undertake this great burden, I guess, 
as Director of Transportation? 

MR. VAN LOBEN SELS: Thank you very much, 
Mr. Chairman. 

I really feel that my military background does 
bring experience and talent, but it's principally because it's 



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been with the Army Corps of Engineers, principally, another 
organization like CalTrans, whose task is to do public works, 
to build infrastructure for the people, in their case, of the 
United States. And I come to CalTrans doing very much similar 
things. Leading a large, complex, geographically diverse and 
dispersed organization, composed of dedicated civil servants, 
which I found at CalTrans. 

But an organization which requires leadership. It 
requires managership, and like most bureaucracies, I don't use 
that terms as a pejorative term. That's what government 
service really is, an institution of framed — systematic 
framework. 

It requires change and redirection from time to 
time, and I found CalTrans to need that, to improve its 
delivery, to reduce its cost of doing business, to be more 
sensitive to the environment, and to care for its own 
employees, and to take full advantage of the great cultural and 
ethnic diversity we have in this great State of California. 

So, I see that as both a challenge and a great 
opportunity. And I think my background and experience in 
contracting, in relationships with interest groups and with 
Legislators, will lend me the opportunity to do some good. And 
I look forward to that opportunity, subject to your 
concurrence . 

SENATOR CRAVEN: Thank you. 

Senator Petris . 

SENATOR PETRIS: I'm interested in the smoking 



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88 
policy on the trains. You probably heard me ask that. 

MR. VAN LOBEN SELS: Yes, sir. 

SENATOR PETRIS: First of all, it's against the 
law. And yet, we have a policy established of permitting 
smoking in the first five rows . 

Can you comment on that? 

MR. VAN LOBEN SELS: Yes, I'd like to do that very 
much. 

I'm aware of your concern, and did a little 
research. The state law correctly says, as you're very much 
aware, in public conveyances, you're not supposed to smoke. 

But in regard to Amtrak, it's — and it includes 
Amtrak, and then there's a parenthetical phrase that says, "As 
provided — Except as provided by federal law. " 

And Amtrak 's view from reading of the federal laws, 
they have the the right to set standards of service. And 
Amtrak has been unwilling to eliminate smoking on their trains, 
and their trains, whether they run them or we contract with 
them to run them. They feel they have the authority to set the 
levels of service, including whether or not — 

SENATOR PETRIS: Well, there's been litigation on 
this over the years, not on this specific train, but the key is 
what does service mean. 

MR. VAN LOBEN SELS: Yes, sir. 

SENATOR PETRIS: Does service mean providing booze, 
food, or does it extend to whether or not you can smoke? 

Our counsel believes that we do have authority, 



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Legislative Counsel believes we do have authority to prohibit 
smoking. He expressed that at the time the legislation was 
first carried and has repeated it since. So, we may have a 
conflict in interpretation there, which, of course, is part of 
life. You can find two sides to just about any issues, I know 
that. 

MR. VAN LOBEN SELS : Let me go on to say that I 
agree with you wholeheartedly, particularly on the Capitol 
corridor, running between Sacramento and San Jose, we should 
not have smoking on that train. 



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SENATOR PETRIS: That's the one I'm concerned 

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about . 

MR. VAN LOBEN SELS: A month ago, more than a month 
ago, I wrote to Amtrak in Washington and said I would like you 
to run a demonstration project to demonstrate that you are not 
going to lost ridership by stopping smoking on relatively short 
runs. In fact, I think they ought to, in my view, have the 
same standard as the airline industry: a four or five hour 
trip, you can make it without smoking. 

I don't have an answer yet, but it's my objective 
to press that. 

SENATOR PETRIS: I'm glad to hear that. It's a 
state-funded train, though; isn't it? 

MR. VAN LOBEN SELS: Yes, sir. 

SENATOR PETRIS: The Hannigan bill and the bonds 
enacted by the people? 

MR. VAN LOBEN SELS: That's correct, and we should 



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have a say. 

SENATOR PETRIS: Yeah, I would think so. 



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I guess that was incorporated in your information 

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to them in the letter. 

MR. VAN LOBEN SELS: Precisely. 
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SENATOR PETRIS: I have one other area, and that's 

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the fares. I understand that since the fare change went into 

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effect, there's been a big drop in the use of the trains. 

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What is the status of that now? 

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MR. VAN LOBEN SELS: What we had in the early days 
in the beginning, as a good marketeer would, we had some 
promotional fares. We had some two-for-one opportunity and 
return for a dollar. 

And when they ended, we ended the two- for totally, 
and then over the Easter period, we backed out of the one 
dollar return. 

The result was expected. On the weekends, 
ridership did drop. During the week, it did not. The 
ridership still, even with the reduction, has exceeded and 
continues to exceed our expectations . 

We will continue to examine promotional 
opportunities to introduce more and more people to the train, 
and then encourage them to do it on a routine basis. 

Our biggest challenge is, in the early days, was to 
get enough cars to meet the needs on the weekends . And right 
now, we're in a little more comfortable position, but we want 



the riders . 



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SENATOR PETRIS: Are cars that scarce? Is that 
because Amtrak has had a lot of success — 

MR. VAN LOBEN SELS : Amtrak is having some success 
around the country. We had to, on weekends, we borrowed cars 
from the Peninsula commute line, down the peninsula, where they 
didn't need them on the weekends. So, we borrowed cars to run 
on this line during weekends. 

SENATOR PETRIS: I guess the use of Amtrak 
generally today is much higher than it was in the early days? 

MR. VAN LOBEN SELS: Yes, it is. 

SENATOR PETRIS: They were really struggling for a 
while, and they almost got eliminated by national policy. 

But their ridership is up significantly, isn't it? 

MR. VAN LOBEN SELS: And we're contributing to that 
here in California since the great success is between Los 
Angeles and San Diego. In fact, we're nearly paying for 
itself. The fare box ratio is 99.6 percent, which is nearly 
paying for itself off the fare box. 

SENATOR PETRIS: Do you subsidize the other runs at 
all? 

MR. VAN LOBEN SELS: Yes, we do. 

SENATOR PETRIS: Oakland to L.A., for example? 

MR. VAN LOBEN SELS: No, not their regular runs. 

SENATOR PETRIS: That's a regular run. 

MR. VAN LOBEN SELS: That's their regular runs. We 
do subsidize the San Joaquin, from Bakersfield up to Stockton 
and into the Bay Area at about — the fare box return there is 



92 

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about 66 percent at this time, but it tends to grow over time. 

2 

And as it rises, as we intend to do and want to do very much in 

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the San Joaquin, is add another train, because part of it, of 

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your objective, is to increase ridership and increase service. 

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And our hope on the Capitol corridor, by the end of this 

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decade, is to have six trains a day, so that you have — you 

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can go to the City on one train, have a meeting, and then don't 

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have to wait until the end of the day to get back on the train. 
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SENATOR PETRIS: I want you to know, this isn't 
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your line, but you're going in that direction. I think it's 



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great . 

I took a ride to Santa Barbara last year in 
November on the regular Amtrak run, and I just thought it was 
great. The dining car service was great. 

The last time I rode in a so-called dining car, it 
was full of vending machines where you get some pop and a 
sandwich. This was full service dining, excellent food, 
reasonable rates, and so forth. 

Does this train run by contract with the state? Do 
you make a contract with — 

MR. VAN LOBEN SELS : We made a contract with 
Amtrak. 

SENATOR PETRIS: For how long? One or two years at 
a time? 

MR. VAN LOBEN SELS: I don't know what the length 
of the contract is. I expect it's a year with options to 
renew . 



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SENATOR PETRIS: I would recommend that maybe you 
can get them to agree to ban smoking as part of the contract . 

MR. VAN LOBEN SELS: I promise I'll work hard at 
that. 

SENATOR PETRIS: Thank you very much. 

SENATOR CRAVEN: Senator Mello. 

SENATOR MELLO: I don't have any questions, but Mr. 
Reyes is here. He had presented me a list of questions that he 
had based on affirmative action. He may want to testify, and 
then I got a copy of Mr. Van Loben Sels ' s response. 

After his questions, it might be good to have this 
made part of the record so we can have your response in the 
transcript as well as his questions . 

MR. VAN LOBEN SELS: Yes, sir. 

SENATOR CRAVEN: And who are your speaking of? 

SENATOR MELLO: Mr. Eugene Reyes. He's sitting 
there . 

Were you going to ask your questions? 

MR. REYES: Senator, I'm not prepared to ask the 
question. I was going to make several other comments. 

SENATOR MELLO: It's up to the Chairman. This is 
the time you can testify and make comments. 

SENATOR CRAVEN: Very well. 

If there are no other questions of the Members, 

! 

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fine. Please go ahead. 

MR. REYES: My name is Gene Reyes, and I represent 
the ALIANZA, which is a group of Native Americans, and Hispanic 



94 
business men and women in California. 

And we took a very strong interest in this 
confirmation for Mr. Van Loben Sels, because of the tremendous 
impact that that Department has financially and employment in 
terms of Hispanics in the State of California and American 
Indians, the opportunities for contracts, contracting 
opportunities are tremendous and are very important to this 
particular group of people. 

Initially, we had indicated that we had various 
concerns which were sent out to you in a letter. Those 
concerns in detail, fortunately we were able to meet and 
discuss point by point. 

I submitted a report to you on every one of those 
points, and we feel very happy with the results. Every one of 
those points was addressed, particularly that dealing with 
affirmative action. 

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We're very pleased with the position and the 
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results that have — that were made available to us since the 

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term that the Director has been in office in his position, thus 

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culminating in modifying our position initially, which was to 
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be in opposition to the confirmation, to where we are now, we 

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are recommending confirmation of the Director. 
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SENATOR MELLO: Mr. Chairman, with that, if I may 
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ask Mr. Reyes then, and both Mr. Van Loben Sels, the Rules 

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Committee does have copies of the questions brought up by 



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ALIANZA dealing with affirmative action and the contracts in 
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Loben Sels has submitted what I thought was a good response to 
each and every question here. 

Just to more formally get their responses on the 
record, if I may ask that these letters be given to our 
transcript and be added to the file. 

SENATOR CRAVEN: Please do. Very well, thank you. 

Thank you very much. We appreciate it. 

Mr. Johnston, Gerald W. Johnston, wishes to 
testify. Mr. Johnston has been with us before. 

MR. JOHNSTON: Good afternoon. My name is Gerald 
W. Johnston, and I am Managing Editor for the Small Business 
Exchange, also the original founder or one of the original 
founders of the Advisory Council, which is now called the 
Business Council of CalTrans, and have been a very keen critic 
and admirer of the CalTrans Business Council and the CalTrans 
Office of Civil Rights. And currently, Mrs. Algerine McCray, 
who is the Chief of the Office of Civil Rights, I've had a 
great deal of admiration and worked very closely with her. 

In fact, this coming week, we are putting out a 
special edition, which is a salute to CalTrans. And we are 
doing a salute to CalTrans because of the fact that, of all the 
major agencies in the State of California, CalTrans is the 
leading agency that is providing business opportunities and 
jobs to minority business of all ethnic persuasions, including 
women. And I think it's time that we recognize the significant 
contribution that this Agency makes and can make in the future 
'for minority business and the minority business community. 



96 

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Within the package that I've given you, it 

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demonstrates there is in that package a letter from the 
3 

Governor that would appear in the special edition, which 

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salutes Mr. Van Loben Sels and Mrs. Algerine McCray for 

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outstanding performance. 
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Clearly, Mr. Van Loben Sels is seven months into 

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the program, but in discussing with Algerine McCray and some of 

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;ithe people who implement the affirmative action and the program 

jfor CalTrans, they speak very highly of Mr. Van Loben Sels. 
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And I've sat in on a couple of meetings that he's sat in on the 

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Council, and I'm very impressed with Mr. Van Loben Sels. And I 

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think that he will carry on the tradition that has taken place 



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within CalTrans of providing contracts and opportunities to 
minority and women businesses. 

Also in that package there's a survey, one done by 
Associated General Contractors, which they had attempted to 
demonstrate that the — what they call special preferences 
wasn't working. When you read that — that survey, you will 
find that it is, and working very well in providing jobs. 

And so, I think that the CalTrans have a real key 
role to play in providing the kind of economic opportunities 
that is going to be required in the coming years to help 
develop a minority community. 

The other part of that survey is a survey that 
we've done as a newspaper, which demonstrates again that 
CalTrans are providing for all the construction that goes to 
minority and women businesses in California, CalTrans is 



97 

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providing 11 percent of the total to all the construction, 

2 

which is, again, a very significant piece of business for 

3 

minority business in the State of California. 

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So with that, I understand that there was criticism 

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of the program and of the person who's who chief of the Office 
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of Civil Rights. And I came here for two reasons. One, to 



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support the confirmation, and to support the program that is 
being implemented in the Office of Civil Rights. 

SENATOR CRAVEN: Thank you very much, Mr. Johnston. 
We appreciate it. 

Is there anyone else that wishes to testify? 

MR. SELIX: Rusty Selix, representing the 
California Association of Councils of Governments, which 
includes the Regional Transportation Agencies, and our elected 
official delegates and executive directors who work close with 
Mr. Van Loben Sels . 

They've asked me to come and indicate their strong 
support. They've found that he is doing an incredible job of 
building the partnerships necessary to make the transportation 
system of this state work, particularly in light of the major 
changes in federal law which require completely new working 
relationships . And we are most impressed with his masterful 
skill in bringing everybody together, and commend him to you. 

SENATOR CRAVEN: Very good, thank you. 

There appears to be no further comment. Oh, there 
is someone, excuse me. 

MR. KNOX: I'm sorry. I'd just like to add my 



98 
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voice to the chorus. 

2 

Jim Knox, with the Planning and Conservation 
3 

League. I'm the Urban Affairs Director, dealing primarily with 

4 

transportation issues. 

5 

Over the years , we've endured a great deal of 

frustration with CalTrans because of what we perceived to be 

1 ' 

i institutional bias against rail and other forms of transit. 

8 | 

We find Mr. Van Loben Sels to be a breath of fresh 

air. We have found him to be accessible, open-minded, and 

10 

seems to have a very sincere interest in orienting CalTrans so 



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that it is multi-modal and a balanced system. 

Just to give you an example, when Mr. Van Loben 
Sels first came on board, we arranged a meeting of all the 
leaders in the environmental groups to meet with him. As far 
as I know, that sort of a dialogue is unprecedented. We talked 
about everything from road salt to high-speed rail, and expect 
to have that dialogue continue and wish to strongly support his 
confirmation. 

SENATOR CRAVEN: Thank you very much, sir. 

Now. 

I 

SENATOR BEVERLY: Move approval of the nomination. 

SENATOR CRAVEN: Senator Beverly moves. 

Call the roll, please. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 



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SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. 

SENATOR CRAVEN: Aye. 

SECRETARY WEBB: Craven Aye. 

Senator Roberti. 

Four to zero. 

SENATOR CRAVEN: Very good, to the Floor. 
[Thereupon this portion of the 
Senate Rules Committee was 
terminated at approximately 
5:12 P.M. ] 

— ooOoo — 



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100 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of 
the State of California, do hereby certify: 

That I am a disinterested person herein; 
that the foregoing Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel 
or attorney for any of the parties to said hearing, nor in 
any way interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my 
hand this /(> _ day of May, 1992. 




EVEL^ 

Shorthand Reporter 



101 

STATE OF CALIFORNIA— BUSINESS, TRANSPORTATION AND HOUSING AGENCY PETE WILSON, Govmmor 



DEPARTMENT OF TRANSPORTATION 


OFFICE OF THE 


DIRECTOR 


1120 N STREET 




P.O. BOX 942873 




SACRAMENTO, CA 


94273-0001 


(916) 654-5267 
FAX (916) jgAftgg 
TDD (916) <M*$4A 


OCX 654-6608 
<XX 654-4014 




May 6, 1992 



Mr. Eugene V. Reyes 
ALIANZA Representative 
1606 H Street, Suite B 
Sacramento, CA 95814 

Dear Mr. Reyes: 

This correspondence serves to reiterate my commitment to Affirmative Action and 
Equal Opportunity in both Caltrans employment and business. 

As Director, the first policy I issued was on Affirmative Action and Equal 
Opportunity. I did this because I value the need for inclusion of all segments of the 
California population in their search for Caltrans opportunities in employment business and 
services. 

The following are my responses to the points we discussed during our meeting of 
May 5, 1992. 

1 . I am committed to bring "bid shopping" or any other types of abuses to a halt. As 
you know, I have reduced the period for the contractor to submit the related documen- 
tation from about ten days to four days. Cooperative efforts are now being made to 
enhance communication and understanding between minority and nonminority busi- 
nesses of the implications of the 2nd Friday Letter and of business relationships in 
general. It is important that this be concluded before any further adjustments to the 
2nd Friday Letter are made. I will include your organization in this process. 

2. I agree there is a need for the Caltrans top leadership to be more visible in the 
Caltrans Business Council (CBC) meetings. While the Chief, Division of Civil 
Rights will be responsible for the implementation of this function, I, my Chief 
Deputy Director or any one of the Deputy Directors will attend all the general 
sessions of the CBC meetings. 

3 . Caltrans will pursue the recommendation of having private business representatives 
participate or observe in the selection and evaluation process of professional engi- 
neering firms. 

4. As indicated, Morrison Knudsen Corporation has informed us of their commitment 
to use their best efforts to achieve the Caltrans DBE/WBE goals of 15%/5%. The 
concept of establishing an entity such as "Transit Program Review Board" has merit 
and will be considered for adoption. 



Mr. Eugene V. Reyes 
Page 2 
May 6, 1992 

5. Yes. We support the recommendation to have "bid fairs" or "business fairs" to 
enhance the continuing participation of minority and women owned businesses for 
goods and services. We will establish a schedule to have these fairs done 
periodically. 

6. Yes, we agree with your recommendation. We will establish an employment 
council that represents everyone. We are committed to emphasize Hispanic 
representation at all levels. Caltrans welcomes the opportunity to enhance the 
dialogue between the Department and the minority, women and disabled 
organizations. I will seriously consider the establishment of a more formalized 
advisory committee to enhance the implementation of the Affirmative Action 
Program. 

7 . I agree to establish a Hispanic employment segment as part of the Department's 
Affirmative Action Plan. I am professionally and personally committed to increase 
Hispanic representation in the Caltrans work force. Since October, 1991, when I 
first arrived at Caltrans, the Hispanic employment rate was 1 1.9%. Today the rate is 
16.1%, and, I'm sure it will continue to improve. The best news, however, is that 
the affirmative action goal to increase representration of Hispanics in the Caltrans 
work force by 0.6% was reached during the third quarter. We expect to do better 
when the last quarter is accounted for at the end of the fiscal year. Finally, I have 
made two Career Excutive Assignments (CEAs) during my brief tenure as Director. 
It happens that these two individuals are Hispanics. One is a Hispanic woman. 

8. You are right. Yes, we already are taking action. Caltrans is also concerned about 
the disproportionality of adverse actions taken against Hispanics and Blacks. 
Despite the fact that this disproportionality is typical in other State agencies and that 
it has been acknowledged by the State Personnel Board, Caltrans has initiated 
several steps to address this issue. First, Caltrans has an in-house adverse actions 
task force under the umbrella of the labor relations unit. This task force is made up 
of representatives of our various Affirmative Action employee advisory committees. 
The task force looks for ways of addressing the issue internally. Also, Caltrans has 
developed an in-house data base to begin collecting information of all disciplinary 
actions. This data will show management any potential problems or trends that 
would need a closer look. There are several other actions being employed by the 
Department that we would be eager to share with you in more depth. I invite the 
ALIANZA to be part of this task force to help us find solutions to this difficult and 
sensitive problem. 

I am appointing Mr. Jose Perez to follow-up with you on these items. I trust this 
accurately reflects our dialogue. Should you have any further questions, please don't 
hesitate to contact me directly. 

Sincerely, 




rAMES VAN LQBE 
)irector 



103 



ALIANZA 






Board of Directors 

EDMUNDO LOPEZ 
President 

ED VELARDE 
Vice-President 

^UL GUERRERO 
Treasurer 

ROLANDO ARANGO 
Secretory 



Members 

California Gb'rertfM) Foundation 
California Hrsoonic *of«sonol« fesobation 
California indian ftigncs association 
Owmo redaction o< San ffeao 
ftUO/lwa of Vbfcjo 
Hi$DOnic Contractors Association 
Latin Busnss Assobotion 
'Jolionoi CandKo of America 
''ofonol Indian Contractors Association 
Northern Califormo Latin Success Association 
Sodety of Hisoonic ^ofasonol Enoinws 
Jnitoj Latino PoiilicDi Association 
'Jniled Knnrity Susincss Entreorows 



May 6, 1992 



Senate Rules Committee Members 

Subject: James van Loben Sels confirmation hearing as Director 
Department of Transportation. 



Dear Senators: 

Attached is: (1) the letter dated May 5, 1992, submitted to you as a 
notice that ALIANZA, Inc., would be testifying in opposing to Mr. James 
van Loben Sels confirmation as Director of the Department of 
Transpiration, (2) the document identifying the areas of concern that 
ALIANZA, Inc. had as justification for its position of opposition and (3) 
the corresponding responses of Mr. James van Loben Sels as a result 
of a meeting held on May 5, 1992. 

As indicative by the positive response of Mr. James van Loben Sels, 
ALIANZA now goes on record in support of his confirmation. 

Also, we request the opportunity to return in six month and report on 
the progress made on these agreements. 



Respectfully , 




Eugene V.Reyes 
ALIANZA Representative 
(916) 444-0940 

ER:lr 



104 



Board of Directors 

EDMUNDO LOPEZ 
President 

ED VELARDE 
Vice- President 

PAUL GUERRERO 
Treasurer 

ROLANDO ARANGO 
Secretory 



A L I A N Z A 



May 5, 1992 



Senate Rules Committee Members 

Subject: James van Loben Sels Confirmation Hearing - Director of 
Transportation. 



Dear Senators: 






Members 

CoMornio afmto foundation 
Cotikynio Himnc ^oiSBonots «ssooolion 
Colifornio Indion 3u9ns5 Jssooodon 

Chicano fedeaiion of Son tfeqo 

^UO/MO o< vw^o 

rbqponc Contractors fcHDOQfccn 

Lotin 8usin«a «8S0O0lion 

^okonot ConoN) of fcnefico 

:<otiono indion Contractor* AsSOOOMn 

Norlhern Cotitbrno Ifllin 8u9"CS JfflDOOlion 

Society of Hiaonic fVofessonoi tnqinws 

jnnni ^iijno PotrlicoJ association 

'Jmlrt *vxit» 8u9«eS5 Odsxeneixs 



Alianza, Inc. is an alliance of Hispanic and American Indian business, 
employment and political organizations statewide. 

We strongly oppose the confirmation of Mr. James van Loben Sels as 
director of the State Department of Transportation and urge that he not 
be confirmed by the Senate Rules Committee. 

Mr. van Loben Sels has directed Cal-Trans for about eight months. 
During this time he has shown to be insensitive and non-caring about 
the adverse impact his actions and policies are having and will 
continue to have on us. We are an increasingly significant element of 
California's economic and political future which must not be ignored. 

We have specific concerns with Mr. van Loben Sels dealing with a 
wide range of issues, which will be presented at the time of the 
hearing. 

Several of our members and myself will testify at Mr. van Loben Sels 
confirmation hearing. 



Respectfully , 




Eugene V. Reyes 
ALIANZA Representative 
(916) 444-0940 



^^ 



^6C6 H STREET. SUITE 3 



SACRAMENTO. CA 95814 



■916) 443-0969/FAX 444-?374 



105 



A L I A N Z A 



May 5, 1992 



The major concerns of ALIANZA with Mr. van Loben Sels are his detrimental and 
destructive actions, policies and procedures related business practices, community 
relations and a representative work force. 



#1 CONCERN: 

Mr. van Loben Sels personally signed a policy statement putting in place an 
underground regulation that is highly detrimental to the development and growth of 
minority owned firms. This has to do with allowing bidders on its highway construction 
projects to submit the names of minority owned firms, that will be used to meet 
established goals, four days after bid opening. This encourages bid shopping which is 
illegal and unethical and forces minority firms to undercut themselves which, in many 
cases leads to bankruptcy. 

RECOMMENDATION: 

We recommend that this policy be rescinded and that it be replaced with one that 
requires bidders to submit with their bids the names of minority firms to be used for 
meeting goals and the dollar amount. 



#2 CONCERN: 

Mr. van Loben Sels reneged on his public commitment to work directly and personally 
with the Caltrans Business Council, to which several of our members belong. This 
was to highlight his commitment to minority business. 

Prior to Mr. van Loben Sels, the Business Council was chaired by a Deputy director 
with the full commitment of the Director and with attendance of the other deputies. 

The Business Council is now directly under one of his Divisions with no visible support 
from him nor his deputies. 

This change has sent a strong message to the construction industry that Caltrans does 
not have a strong commitment to minority business participation. Mr. van Loben Sels 
positioning is having a major adverse impact on our businesses. 

1 

:806HSTHET. SUITE 3 . SCttltfMTO. CA 95814 . (916) a*3-G9»/F« iu-HT*- 



106 



RECOMMENDATION: 

That Mr. van Loben Sels personally chair the Business Council and that he require 
the involvement and attendance of his deputies. This way the commitment will be 
from the directorate of Caltrans and accountability can be held at this level where it 
should be. 



#3 CONCERN: 

The selection process and evaluation for minority business participation in the 
professional engineering services contracts are inherently discriminatory. Hispanic 
and American Indians have a very difficult time obtaining work as prime consultants 
due to notions that minorities cannot perform. Mr. van Loben Sels has been advised of 
this and yet he has not taken any action. 

RECOMMENDATION: 

That Hispanic and American Indians and other minorities participate in the selection 
and evaluation process of professional engineering firms. This will provide some 
assurance that the process will be equitable and fair. This needs to be accompanied 
with the establishment of goals for minority business participation as prime 
consultants. Absent this a rotational system would work also. 



#4 CONCERN: 

Mr. van Loben Sels has initiated exclusionary policies in the Transit/Mass 
Transportation program, he approved a non-quantified Disadvantaged Business 
Enterprise goal for the building of the California Car project in Los Angeles. This 
resulted in only 3% participation. 

Current law requires a 15% minority business goal and a 5% women business goal for 
state funded projects and Caltrans has a 20% DBE for federally funded projects. Mr. 
van Loben Sels was out of line. We can not afford this type of system exclusion. 

RECOMMENDATION: 

That Mr. van Loben Sels establish a Transit Program Review Board which would 
include proportionate representation of the minority communities. This Board would 
assist Caltrans in getting meaningful participation from all Californians in all aspects of 
the Transit program. 



107 



#5 CONCERN: 

Mr. van Loben Sels exclusionary policies and positions are having an adverse impact 
on minority business participation in the direct purchasing of goods and services by 
Caltrans districts. 

Our members report that since Mr. van Loben Sels came to Caltrans there has been a 
change in the attitude of the purchasing staff. They no longer seem committed to 
doing business with minority firms and sales to Caltrans have declined. 

RECOMMENDATION: 

That Mr. van Loben Sels establish a schedule of monthly or quarterly "Bid Fairs" where 
actual bids for goods and services are taken and when possible make awards at the 
events. This will provide for active hands on participation by Caltrans and everyone 
else. Hispanic, American Indians, minorities in general will have greater participation. 

#6 CONCERN: 

Mr. van Loben Sels disregarded advise, counsel and appeals made to him by 
Hispanics to hire a Deputy Director of Administration that would be accessible, 
approachable and sensitive to the employment issues of Hispanic, American Indians 
and other minorities. Mr. van Loben Sels hired the one individual with whom there is 
no trust nor confidence and no relationship. This decision is having an adverse impact 
particularly on Hispanics. 

Prior to Mr. van Loben Sels, there was the Hispanic Employment Advisory Task Force 
whose mission was to assist Caltrans improve Hispanic representation in its 
workforce. This task force was very effective. Then there was the Caltrans 
Employment Advisory Council whose mission was to help Caltrans with its overall 
employment needs. This Council was quite successful up to Mr. van Loben Sels 
presence in Caltrans. 

Hispanics and American Indians feel that Mr., van Loben Sels complete disregard for 
their recommendations and his aloofness showed that he has no interest in a work 
force that is representative of the people that make up the State of California. For 
these reasons they no longer wanted to invest their time and efforts assisting Caltrans. 

The Caltrans Employment Advisory Council has since been disbanded by Mr. van 
Loben Sels. 

RECOMMENDATION : 

That Mr. van Loben Sels re-establish the Caltrans Hispanic Employment Advisory Task 
Force as an indication of his commitment to bring Hispanics up to parity like other 
groups in the Departments. Also that Hispanics and American Indians participate in 
panels for the selection of high level management positions. 



108 



#7 CONCERN: 

Mr. van Loben Sels is not interested in honoring the commitments to Hispanic 
employment representation made by Caltrans under the previous Director, he has 
totally disregarded the Caltrans Hispanic Employment Plan which was approved and 
agreed and signed by the previous Director. 

Hispanic representation is getting worse in Caltrans, especially with the 1990 census 
count. 

Absent two Hispanic Districts Directors and two assistant directors Caltrans has no 
Hispanic nor American Indian representation in its management ranks. 

RECOMMENDATION : 

That Mr. van Loben Sels commit to the Hispanic Employment Plan agreed to prior to 
his presence in Caltrans. This plan would include parity in the deputy director ranks, 
parity in district director ranks, parity in the district deputy director ranks. 

We strongly recommend, again, the reestablishment of the Caltrans Hispanic 
Employment Advisory Task Force. 



#8 CONCERN: 

Mr. van Loben Sels has shown through his policies and positions that he tolerates 
what appears to be disparate treatment in the application of disciplinary action against 
Hispanics and American Indians. For this reason we are very concerned for the 
increasing number of adverse actions taken against Hispanics in Caltrans. Hispanics 
get a disproportionate greater number of adverse actions taken against them than any 
other group. 

We feel that Caltrans discriminates against Hispanics which causes the 
disproportionately high number of adverse actions. 

RECOMMENDATION: 

That an investigation be conducted to review Caltrans policies and procedures and 
actual practices when dealing with disciplinary action and take corrective measures. 



198-R 

Additional copies of this publication may be purchased for $6.25 per copy plus 
current California sales tax. 

Senate Publications 
1100 J Street, B-15 
Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 

Please include Senate Publication Number 198-R when ordering. 



u 6oo 

no,n 



HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 

U 




MAY 211992 



»***Q 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 13, 1992 
2:03 P.M. 



199-R 



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Reported by: 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 13, 1992 
2:03 P.M. 



Evelyn J. Mizak 
28 Shorthand Reporter 



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APPEARANCES 



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MEMBERS PRESENT 
SENATOR DAVID ROBERTI, Chairman 
SENATOR ROBERT BEVERLY 
SENATOR HENRY MELLO 
SENATOR NICHOLAS PETRIS 

MEMBERS ABSENT 
SENATOR WILLIAM CRAVEN, Vice Chairman 

STAFF PRESENT 
CLIFF BERG, Executive Officer 
PAT WEBB, Committee Secretary 
RICK ROLLENS, Consultant on Bill Referrals 
NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 



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ROBERT P. MARTINEZ, Director 
Department of Economic Opportunity 

SENATOR HERSCHEL ROSENTHAL, Chair 

Senate Committee on Energy and Public Utilities 

CARLOS ALCALA 

CAFE, Black Advocates in State Service 

JOHN LEMMONS, Consultant 
CAFE 

ANITA CARTER, Employee 

Department of Economic Opportunity 



PAUL BOCANEGRA, President 
24 Sacramento Chapter 



CAFE 

GEORGE L. ORTIZ, Chairman 

Board of Directors 

La Cooperativa Campesina de California 

MICHAEL S. JONES 
Proteus, Inc. 



Ill 



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APPEARANCES ( CONTINUED \ 



2 DAVID C. GONZALEZ 

Association of Southern California Energy Providers 

3 

RAUL MAYNELES 

4 La Cooper at iva 

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5 ZIGMUND VAYS, Chair 

Legislative Committee 

6 Association of Southern California Energy Providers 

7 DOUGLAS W. RISLING, Executive Director 
Northern California Indian Development Council 

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GREGORY FEARON, Past Chair 
9 Board of Directors 

Sonoma County People for Economic Opportunity 
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LEO AVILA, State Chair 

11 American G.I. Forum 

12 WILLIAM F.PARKER, Executive Director 
Community Action Agency of San Mateo County, Inc. 

13 President, Bay Area Poverty Resources Council 

14 BARBARA VAUTHIER, Executive Director 
Cal/Neva Community Action Association 

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JIM EVANS, Executive Director 

16 Calaveras-Mariposa Community Action Agency 
Member, Board of Directors 

17 California Coalition of Rural Housing 

18 VAL MARTINEZ, President 
Association of Rural Northern California Energy Providers 

JAN KURIS DOHERTY 
20 City of Los Angeles 

Community Development Department 
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IV 



1 

INDEX 



Page 
Proceedings 1 



5 ^ Governor's Appointees; 

6 ROBERT P. MARTINEZ, Director 

|j Department of Economic Development 

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Introduction and Support by SENATOR HERSCHEL 

ROSENTHAL, Chair, Senate Committee on Energy 



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and Public Utilities 1 

Background and Experience 1 

State Controller's Concern 2 

Reorganization of Department 3 

Equal Employment Opportunity Issues 4 

Witnesses in Opposition t 

CARLOS ALCALA, Attorney 

CAFE and BASS 5 

Request for Postponement of Confirmation 5 

Preparation of Prelimiary Investigative 

Report into Complaints of Discrimination 6 

Questions by SENATOR PETRIS re: 

Status of Cases 7 

Reason for Request to Rules Committee 7 

Group Advised Not to Address Issue 

at This Forum 8 

Specific Request 8 

Amount of Time Requested for 

Postponement 9 

Response by MR. MARTINEZ re: 

Lack of Knowledge of Complaints 9 

EEOC Process Underway 10 



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Willingness to Meet and Discuss 
Any Issues 

Postponement Inappropriate 

Discussion 

Statements by SENATOR PETRIS re: 

Lack of Complaints to Director 

Response by MR. ALCALA 

Matter of Basic Fairness 

Preparation of Preliminary Investigative 
Report 

JOHN LEMMONS, Consultant 
Mr. Alcala 

Results of Investigation 

Sale of T-Shirts 

Reorganization 

Evaluation Criteria Used in Investigation 

Statements by MR. ALCALA re: 

Conclusion of Report 

Response by MR. MARTINEZ re: 

Scope of Employee Interviews in Investigation 

Need for Complaints to Continue through 
Formal Processes 

Commitment to Meet and Discuss Discrimination 
Complaints 

Need to Go Forward with Confirmation 

Statements by CHAIRMAN ROBERTI re: 

Pending Personnel Cases 

Response by MR. MARTINEZ re: 

Seriousness of Matters 



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VI 



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2 Letters to DPA Appealing Employee 

Designations 24 



Inference of Racism and Prejudice 24 



ANITA CARTER, Employee 
5 Department of Economic Opportunity 25 



6 Grievance Process 25 

7 Receipt of Letter in Retaliation 25 

8 Questions by SENATOR PETRIS re: 
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9 !| Instigation of Retaliation 26 

10 | Procedure Followed 26 

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11 Reasons Given for Rejecting Grievance 27 

12 Filing of Compliant with EEOC 28 

13 Lack of Promotion 28 

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14 Questions by SENATOR PETRIS re: 

15 Nature of Retaliation 29 

16 Responsibility of Director 30 

17 Response by MR. MARTINEZ re: 

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18 Recall File 30 

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19 i Lack of Knowledge of Entire File 30 

20 Relationship with Immediate Supervisor 31 

21 J Questions by SENATOR PETRIS re: 

22 ! Job Classification 31 

23 ' Promotion of Lower Scoring Employees 31 

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24 j PAUL BOCANEGRA, President 

Sacramento Chapter 

25 CAFE 32 
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26 General Enviroment at DEO 32 

27 :; Request for Postponement 32 

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Background Several Cases 33 

Russell Salazar 33 

Personal Case 33 

Questions by SENATOR PETRIS re: 

Tenure with Department 35 
Statements by CHAIRMAN ROBERTI re: 

Inclination to Vote for Confirmation 36 

Take up Vote Following Week 37 

Request for Director to Meet with 

Opposition 37 

Witnesses in Support: 

GEORGE ORTIZ, Chairman 

Board of Directors 

La Cooperativa Campesina de California 38 

MICHAEL JONES 

Proteus, Inc. 38 

DAVID CHARLES GONZALEZ 

Association of Southern California Energy Providers 38 

Questions by SENATOR PETRIS re: 

Nature of Organization 39 

RAUL MEYRELES, Director 

La Cooperativa 39 

SIGMUND VAYS, Chairman 

Legislative Committee 

Association of Southern California Energy Providers 40 

DOUGLAS W. RISLING, Executive Director 

Northern California Indian Development Council, Inc. 40 

GREGORY FEARON, Past Chairman 

Board of Directors 

Sonoma County People for Economic Opportunity 41 

LEO AVILA, State Chair 

American G.I. Forum 41 



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2 WILLIAM PARKER, Executive Director 
Community Action Agency of San Mateo County 

3 President, Bay Area Poverty Resources Council 41 

4 BARBARA VAUTHIER, Executive Director 

Cal/Neva Community Action Association 42 

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JIM EVANS, Executive Director 

6 Calaveras-Mariposa Community Action Agency 
Member, Board of Directors 

7 California Coalition of Rural Housing 43 

8 VAL MARTINEZ, President 



Association of Rural Northern California Energy 



9 Providers 43 

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10 j JAN KURIS DOHERTY 

City of Los Angeles 

11 Community Development Department 44 

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12 Statement of Intent to Hold Confirmation 

over for One Week by CHAIRMAN ROBERI 44 



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Termination of Proceedings 45 

Certificate of Reporter 46 



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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 
CHAIRMAN ROBERTI: Now Senator Rosenthal has arrived. 
Do you want to take Mr. Martinez first? 
SENATOR ROSENTHAL: Either one; I'm prepared for 

CHAIRMAN ROBERTI: Senator Rosenthal wants to take 



JMr. Martinez first. Since he's the visiting Chair, I'm going to 

defer to Senator Rosenthal on this. 

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SENATOR ROSENTHAL: Mr. Chairman, Members, I want to 

jcommend the Governor. Take a moment here to commend the 

Governor's appointment of Bob Martinez to become Director of the 

Department of Economic Opportunity. 

I have worked closely with Bob in the past in joint 

efforts to provide essential energy utility services to those 

facing poverty. In my opinion, he's done an excellent job, and 

;jl urge the Rules Committee to recommend that he be confirmed. 

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CHAIRMAN ROBERTI: Mr. Martinez. 

MR. MARTINEZ: Thank you, Mr. Chairman and Members, 
for the courtesy. I appreciate that, in recognition of the fact 
that a number of people have expressed an interest in testifying 

and have come from some distance. 

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Basically, I would just like to say that I have 
served, as the Senator has noted, Senator Rosenthal has noted, I 
have previously served in this capacity. I served at a time 
when there was a lot of instability in this Department, and 
there was a lot of concern: concern by the Legislature, by the 



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public at large, by the media, and by control agencies. 

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We worked very hard to reinstitute stability and an 

access and a credibility, not only to the public at large, but 

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to the community of low-income citizens in California that we 
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serve. 

That is the reason that I served initially, and that 

lis the reason that I accepted the reappointment, because there 

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iwere concerns that were expressed to me by the Governor about 

•(things that were going on in the Department that I felt I had 

! the capacity to address once again. 

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When I took over the Department in September of last 
lyear, we had a number of issues to deal with immediately, not 
the least of which was concern by the Controller's Office, the 
State Controller's Office, about the fiscal integrity of the 

!lDepartment . So much so that they indicated to me in no 

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Sjuncertain terms, through a formal audit finding, that the 
lability of the Controller to assure that warrants should be 
■issued to the network of community agencies could not be 
maintained because of fiscal concerns that the Controller had, 

not the least of which was that there was no audit unit in the 

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•Department. An audit unit is mandated under the assurances that 
we give to the federal government in order to receive over $100 
million of block grant funds. 

We immediately began to address these issues. We 
started to move people in to that accounting and budget function 
that the Department of Finance felt comfortable with, that the 
Controller's Office could feel was responsive. Eight days after 



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I was sworn in, I was able to identify $2.3 million of local 
assistance funds that were carry-over funds that, had I not 
encumbered on that eighth day, on the ninth day would have 
reverted to the federal government. 

Those are the kinds of things that were facing us. 
In addition, the Department of Personnel Administration and the 
State Personnel Board indicated that they had a lot of concerns 
about personnel transactions that had occurred, and so we began 
to deal with those things . We reorganized the Department in a 
way that was asked for us to be reorganized by DPA. And so we 
preceded, keeping in mind that the most important thing is to 
create a sense of stability for the agencies, the 
constituencies, that we serve, and to create a sense of equity 
and fairness in the distribution of monies. 

We began to meet extensively with the associations: 
Cal/Neva, representing the community services block grant 
agencies; La Cooperativa, representing the migrant seasonal 

farmworker agencies; Native American Indians were represented by 

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| three eligible entities throughout the State of California; and 

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Jwe also met with weatherization associations, in Southern 
iCalifornia represented by the Association of Southern California 
(Energy Providers, in Northern California represented by the 
JAssociation of Rural Energy Providers, as well as an association 

in the Bay Area represented by the Bay Area Poverty Resource 

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[Council of which Bill Parker is the President. 

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In any case, I believe that we have moved in the 
i direction that is most opportune in order to provide assistance 



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jito people in need, both in terms of community services and in 
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terms of energy assistance, so much so that we have been able to 



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jmore low-income homes can receive the benefit that energy 

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jweatherization is meant to, to provide assistance to those 



; secure funds from the Department of Housing and Community 

Development that were not exactly moving forthright into the 

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communities to the tune of $4.3 million that are going to be 

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linked with our weatherization monies to provide rehab., so that 



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people most adversely impacted by the oil overcharge situation 
lof a few years ago. 

We have an era of diminishing resources, and I'm 
doing my best in working with the Public Utilities Commission to 
leverage federal funds with nonfederal resources in an effort to 
gain more revenue for those that are most in need. 

I believe that we've created a viable entity in the 

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Department of Economic Opportunity. I think that we have a 
community that feels that we're working in the right direction. 
And I believe that I stand on my record in that regard. 

I've just recently been able to secure a very- 
competent individual by the name of Carmen Ochoa, who comes to 
us as a loaned executive, who, hopefully and in fact has every 
confidence on my part that we'll deal with equal employment 
opportunity issues that have arisen. My door remains open at 
all times. I'm willing to speak and deal with anyone on any 
issue. And Carmen will reiterate that. She has my full 
confidence and support, and I've delegated her that authority, 
and I believe that we're moving in the right direction. 



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And I thank you for this opportunity. Any questions? 

Senator, there are a number of witnesses that have 
come from out of town. 

CHAIRMAN ROBERTI: Yes, I have noted. 

We might do this a little bit differently. I think 
I'm going to see what the opposition has to say before I take 
your support. 

Is there opposition in the audience? How many are 
here opposed? 

Are you here representing all of them? 

FROM THE AUDIENCE: I'm representing CAFE and BASS, 
and that may be all of them. 

CHAIRMAN ROBERTI: Then why don't you come forward. 

This doesn't mean that I don't want to hear from the 
proponent witnesses. 

MR. ALCALA: I've come here today to ask the 

Committee to postpone the confirmation of Robert Martinez. 

ii 

Carlos Alcala, A-1-c-a-l-a. 

With me is Mr. John Lemmons, a 30-plus year former 

^management auditor with the state. I also have Paul Bocanegra, 

'the President of the local CAFE, and Art Jordan, from the Black 

|l 

Advocates of State Service have asked me to represent their 

interests. 

It gives me — I have great pain coming before any 
ij committee to oppose the confirmation of a Mexican-American, 
! because I think that we do not have enough Mexican-Americans in 
|i positions in state government, in meaningful positions such as 



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'directorships . 

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And at this point, I don't want you to misinterpret 

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ilwhat I'm saying, to say that I'm totally opposed to him ever 

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being confirmed. I'm saying that at this moment, from what 

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we've learned, from what we've been able to do, we request a 

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^postponement of the confirmation. 
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I have requested that Mr. John Lemmons prepare — and 

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I asked him to prepare an independent investigative report of 

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the complaints of discrimination that have occurred at DEO, and 
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jjhe has prepared a report . And he gave it to me this morning so 



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that I could see if I was doing the right thing in even being 
here. 

In each case, for Black and Mexican-American 
employees, in each of six cases that he preliminarily 
investigated, he confirmed what we feared, and that is that 
there was a prima facie case of discrimination occurring with 
regard to these employees . 

With regard to management changes that recently 
occurred in the Department, sometimes there's a need for change. 
But I question change when 15 out of 27 minorities end up on the 
short end of the stick. 

The reason that we come to committees like this is 
that we have people like you, Senator Roberti, and Senator 
Mello, and Senator Petris, and the rest of the Senators that are 
with us, it's important for us to know that there is a system 
that works, where we can come forward, where charges can be 
made. Where we know that our — that the allegations that are 



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made are taken seriously; that they are investigated, and that 
the chips will fall where they may. 

If it turns out that none of this is Robert 
Martinez's fault, then I'll be the first one back in line before 
this Committee, saying, "Vote for the man. " 

But if there's substance to what the Chicano 

employees and the Black employees in state government are 

telling you, and member, they don't come often before this 

Committee. How often have you seen them come to oppose anybody? 
i 

SENATOR PETRIS: Every committee, every meeting, we 
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have them. Every meeting we have opposition almost without 

exception. And frankly, I'm getting a little impatient at 

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trying those cases before this forum. 

I've been a strong supporter of upholding our anti- 
discrimination statutes . 

I'd like to ask if there are cases pending? Are 
these six cases now pending before proper remedial tribunals? 

MR. ALCALA: Fifteen now. 

SENATOR PETRIS: Now why are you asking us to try 
these cases? 

MR. ALCALA: Because, Senator, the people have 
elected you to stand up as their voice to put people in 
government that they can have faith in. And for that reason, I 
feel I can come to you, Senator Petris, and ask you to do that, 
because you are — 

SENATOR PETRIS: I understand your attorneys have 
advised you not to do this . 



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MR. ALCALA: I am an attorney. Nobody advised me not 
to do this . 

SENATOR PETRIS: Well, the group. The group has been 
advised not to do this at this time. You're going to be wearing 
out your welcome if you keep this up. 

And I'm the strongest supporter of your groups on 
this Committee, bar none. 

MR. ALCALA: Senator Petris — 

SENATOR PETRIS: I'm just weary of going into these 
cases over and over again that are pending in some other agency. 

Now, if they weren't pending, and you got a pattern 
of discrimination that hasn't reached that point, fine. We can 
go into it. We've done it in other kinds of situations. We've 
done it in the prisons. 

The prison system stinks. And one of the reasons it 
stinks is the kinds of complaints you're making. And some of 
those complaints have been against Latino administrators, just 
as in this case, but we still look into them. 

Do you see what I mean? 

MR. ALCALA: I appreciate that. 

SENATOR PETRIS: So, you know, I guess what I'm 
asking you is, are you asking us to go into these 15 cases, or 
are you asking us to make a judgment based on the investigation 
of your counsel or consultant that establishes enough of a 
pattern for us to reject the nomination or put it over? 

MR. ALCALA: I think what — 

SENATOR PETRIS: What is it you're asking? 



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MR. ALCALA: I think what I'm asking you to do is to 
postpone the confirmation to allow the system to work. 

There are investigative procedures . There are other 
forums . And there — 

SENATOR PETRIS: How much time? 

MR. ALCALA: — will be investigations. 

SENATOR PETRIS: How much time do you think is 
necessary? 

MR. ALCALA: Two, three months. 

SENATOR PETRIS: Let's see how that affects 
Mr. Martinez. 

When is his deadline? 

MS. MICHEL: September. 

MR. MARTINEZ: September. 

SENATOR PETRIS: September? After we leave? 

Well, we could do it before we leave, I guess. 

That's another problem. We run past the deadline, 
then he's out for no established reason. Nobody's acted on it. 

I'm trying to be fair to Mr. Martinez as well. 

MR. ALCALA: And I appreciate that it's — 

MR. MARTINEZ: If I might? 

CHAIRMAN ROBERTI: Mr. Martinez. 

MR. MARTINEZ: Mr. Chairman, with all due 
recognition of the attorney here, I — I have not been 
approached by the individuals that are the complainants. The 
first I knew that there was an EEOC complaint filed was when it 
was made available to me because it was presented to Rules. 



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Up until this Monday, I had not seen a copy of these 
allegations. They had not been shared with me, nor had any of 
the individuals come forward to me to discuss their individual 
concerns . 

In the one instance wherein one of the particular 
complainants came forward to me as a result of a letter of 
reprimand that was put into her file by her immediate 
supervisor, she came to me with her representation from CSEA. 
We met. We discussed the issues, and the resolution was, I 
removed the letter of reprimand. 

I can deal with the issues on an individual basis, 
but when they are not presented to me, and in fact, are now part 
of a federal EEOC process, that process will ensue. It'll take 
whatever time it takes. It could take three months; it could 
take a year. 

But apparently that process has begun, and that's 
fine. I have no problem with that. I have no predisposition 
about that. Let the chips fall where they may. 

I only ask, and as I told Paul yesterday when I had 
an opportunity to meet with him finally, I am willing to meet 
and discuss with anyone any issue. I brought Carmen Ochoa on 
board expressly for the reason of having someone who has the 
expertise and the skills to provide our agency, our top 
management, because she is a part of top management, the kinds 
of — the kinds of resources, and the kinds of sensitivity 
that's necessary to have to set up the kinds of EEOC committees 
that are necessary in order to clearly convey a willingness to 



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meet and discuss with anyone any issue they feel has adversely 
impacted their status . 

I'm willing to do that. I make that commitment now. 
I would make that commitment with anyone at any time whether I'm 
confirmed or not confirmed. As long as I am Director of this 
Department, I make that commitment. 

To postpone this thing in order to let an EEOC 
process to on is, in effect, saying that I don't know what I'm 
doing; I'm not capable of acting on my own, and I don't think 
that ' s appropriate . 

MR. ALCALA: Well, what I was going to say is, 
hopefully, if what Mr. Martinez is saying is that he intends to 
do something about the things that are coming to light, then 
it's not just the EEOC. It's something that he's proposing to 
do, and something that can be evaluated. 

But you just don't have 60 percent of the — all the 
minorities in the Department affected in one fell swoop — 

MR. MARTINEZ: Excuse me, I don't think — 

MR. ALCALA: — moments after a Director comes in — 

SENATOR PETRIS: I guess it wasn't very serious, 
because nobody complained to him. 

MR. MARTINEZ: I've got 99 employees that have 
signed — 

FROM THE AUDIENCE: [Inaudible.] 

CHAIRMAN ROBERTI: Everybody will have a chance. 

SENATOR PETRIS: He says that none of the people here 
to testify ever went to him and complained. 



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If that's true, then you don't have a very strong 
position, and that's what I don't like. I don't like saving 
that for this forum. 

MR. ALCALA: Senator — 

SENATOR PETRIS: Going through the process, and 
you're totally frustrated by some unwarranted and unreasonable 
arbitrary action, fine. I personally would like to hear it, and 
I think the Committee Members would, too. 

MR. ALCALA: Senator, with all due respect, four of 
them have already filed for State Personnel Board hearing. Six 
of them had complaints accepted this week by the federal EEOC; 
six more have had complaints referred to the State DFEH. 

And if you're telling me that, no, they didn't go 
speak to Martinez as the first line for relief because they felt 
that he may be the one responsible for their plight, you're 
right. They didn't go to him as the first line. 

They thought that they might get relief in the 
administrative agencies that the Legislature has created, and 
said, these agencies are out there to investigate wrongdoing, if 
it exists, and to resolve it, and to do things of this nature. 

Now, his position — our position with this is, 
that's what they're doing. And there's time for a procedure to 
work. They're doing that. And in the interim, we're here 
because the confirmation of this man is going forward now. And 
these complaints have not been fully investigated. 

You don't know what the results are; neither does he. 

What we do know is that you have this many people 



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with these big a problems [sic], and it's an enormous part of 
this Department. And it is a very large segment of that — of 
the minority population of that community — of that Department. 

And there has to be a feeling somewhere that — that 
we have government that's responsive, that there isn't just a 
frustration that we complain, we tell them what's wrong, 
,government doesn't really care, because they have other — 
because they have other agendas . 

SENATOR PETRIS: All right, let me go back to the 
other point. 

It's a matter of basic fairness. It seems to me that 
most people, when they're abused, will make a compliant to the 
abuser. 

Are you saying that either it has been done without 
any attention being paid, or it hasn't been done because of a 

feeling of frustration, it wouldn't do any good anyway? 

i| 

When a man says, "Look, if they had come to me, I 

would have talked to them, " I need to know whether they made any 

effort to go to him, and if not, why not. I don't think that's 

an unfair question. 

MR. ALCALA: I don't think it's unfair at all, 
either, Senator. Don't misinterpret me. I'm not criticizing 
you for saying that. 

What I'm telling you is that minority people aren't 
necessarily going to have the greatest confidence in the person 
they identify as the source of the problem. It doesn't work 
that way. 



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You don't go to the person that you think is causing 
the problem and say, "Listen, we're here. You've got the power 
to fire us, and we're coming in here before you." That's not 
the way it's going to happen. 

MR. MARTINEZ: Is the inference there that I'm not a 
minority? Is that what you said? 

MR. ALCALA: No. There's an inference that you're 
the source of the problem. 

SENATOR PETRIS: Well, I hope there's more than an 
inference in the testimony, you know. Otherwise, we're wasting 
our time. 

MR. ALCALA: What I can give you is — what I have is 
the independent investigative report. I had a person with 30-40 
years in state government; 20-some of them he spent as a 
management auditor for the Department of Finance. 

And I said, "Go, conduct an investigation, management 
audit, on this issue and tell me. If there's nothing there, say 
it. " 

He came back with a four-page preliminary 
investigative report saying there ' s a substance to everything 
these people are saying. 

SENATOR PETRIS: Attributed — 

MR . ALCALA : I ' ve got it here . 

SENATOR PETRIS: And it's all attributed to 
Mr. Martinez? 

MR. ALCALA: He's attributed it to Mr. Martinez, but 
you could ask him for himself [sic]. This is Mr. Lemmons that 



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prepared the preliminary investigative report. 

By the way, Senator, there will be other people 
speaking after me for which I have the greatest respect. Some 
of them coming from the American G.I. Forum, with whom years ago 
I had a chance to work with Hector Garcia, and even Bill Garcia, 
who's here today. These are people I have the highest respect 
for. Some of them are going to be telling you that Robert 
Martinez ought to be confirmed today. 

And what I'm telling you is that we have a different 
perspective, because I'm here representing the employees that 
are in state government in this Department. We're not — 

SENATOR PETRIS: That's fine. I don't have any 
quarrel with that. 

But I just didn't want to be trying 15 cases today. 

MR. ALCALA: We don't expect you to try 15 cases, 
Senator. 

SENATOR PETRIS: Okay, thank you. 

CHAIRMAN ROBERTI: Next witness. 

MR. LEMMONS: I've been asked by Carlos Alcala, 
attorney at law, to conduct an independent investigation of the 
complaints by employees in the Department of Economic 
Opportunity to determine if a prima facie case of racial 
discrimination could be established under the Civil Rights Act 
of 1964. 

I interviewed ten employees who complained of 
discriminatory treatment from the Robert Martinez 
administration. During these interviews, it became obvious that 



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these employees feel their workplace was a hostile environment 
of political conflicts and turmoil. From those interviews, a 
common story evolved which I believe is essential to an 
understanding of these complaints. So, I'd like to take several 
minutes to provide background information that was given to me 

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by some Department employees . 

In the backgrounds, Robert Martinez, an Hispanic, was 
first appointed Director of DEO on October, '84, served until 
May, '88, and during that period when the Department was not 
civil service, he hired four white women to serve as his 
management team. This team was led by Ms. Toni Caffrey Curtis, 
whose brother, David Curtis — David Caffrey, worked in the 
Governor's Cabinet and had responsibility for overseeing the 
Department . 

Mr. Martinez was succeeded as Director by Theresa 
Alvillar Speake in August, 1988. Some employees said they 
observed a telephone campaign being conducted against Theresa 
Alvillar Speake ' s appointment by staff members. 

Theresa as Director gained a reputation for being 
supportive of equal employment opportunities . The Department 
employees were becoming more assertive about — assertive after 
gaining civil service status in 1986. Theresa Alvillar Speake 
apparently made some decisions that were unpopular with the four 
white women managers, which diminished their influence. 

So, when Mr. Martinez again became available for 
reappointment, some employees believe the four women, white 
women managers, began a campaign within the Governor's Office to 



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get Theresa Alvillar Speake ' s appointment terminated, and 
Mr. Martinez's reappointment as Director. 

There were a number of issues of an underground 
newsletter, "The Last Gasp", circulated through the Department 
on a periodic basis. The newsletters politically satirized the 
Department and was critical of Theresa's administration. 

Theresa's appointment was terminated on September, 
1991, and Robert Martinez was appointed on September 20th, 1992 
[sic]. On his arrival at the office the first day, Robert 
Martinez was greeted by some of his former staff members wearing 
T-shirts inscribed with — 

MR. MARTINEZ: Are you kidding? Are you going to 
pull out the T-shirt? 

This is great. I want you to take note of a T-shirt 
that appeared on that day. 

MR. LEMMONS: "Ding Dong The Wicked Witch Is Gone". 

MR. MARTINEZ: That's great. 

MR. LEMMONS: These shirts were being sold in the 
office and worn by employees who wanted to be identified as 
Robert Martinez supporters. 

Some employees were of the opinion that the T-shirt 
resulted in a further division among the staff, believing that 
such a display was discriminatory and unprofessional. Other 
employees were quick to note that there were no further "Last 
Gasp" newsletters. Thus began Robert Martinez's second 
appointment as Director. 

Within five days of being appointed, Mr. Martinez 



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began implementing a reorganization that some employees believe 
has systematically removed minority employees from positions of 
influence and replaced them with white employees. 

Employees contend that at the time Mr. Martinez was 
appointed, the Department had approximately 105 employees, 30 of 
which were minority employees above the level of office 
assistant. At the present time, at least 16 of those 30 
minority employees have been adversely affected by Robert 
Martinez ' s reorganization. 

MR. MARTINEZ: That is not correct, but I guess I'll 
speak to that later. 

MR. LEMMONS: The gravity of the situation is the 
size of the Department. This represents more than 50 percent of 
the minority employees adversely affected with a very small 
percentage of white workers similarly affected. 

All six of the Department's employees who have filed 

i 

complaints with the U.S. Equal Employment Opportunity Commission 
have had their complaints accepted. It is my understanding that 
there are more employees who have initiated — have intentions 
•of filing with that agency. Also, four employees have asked for 
State Personnel Board hearings regarding the cancellation of 
their promotions. 

A review of the five cases — I think it's six cases 
— that were filed, I applied evaluation criteria and reached a 
conclusion. The first category is — there were three employees 
who complained of being removed from their positions with the 
Department . 



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The criteria for determining a prima facie case in 
these situations are: A, was the employee in a protected class; 
B, was the employee qualified for the job; C, was the employee 
doing the job satisfactorily; D, was adverse action taken. 

MR. ALCALA: There are in this category, without 
going through and retrying, as Senator Petris asked, the 
conclusion was reached that the employees in this category had 
established a prima facie case. 

In the second category were people that complained 
about disparate treatment. One of the people that complained 
about disparate treatment complained about this T-shirt. 

I realize that Mr. Martinez doesn't consider this a 

serious thing. He's shown that now. But there were employees 

|i 

that complained to him that they saw it as rude, unprofessional, 

and discriminatory against minority employees . 

MR. MARTINEZ: One employee. 

MR. ALCALA: This employee suffered adverse action; 
had to seek relief; has been harassed ever since the time that 
she complained about this T-shirt. She has not led the same 
life. 

In the last category, we had Black employees who were 
demoted or were denied promotions . With regard to the Black 
employees that were denied promotions or demoted, the same 
criteria was applied as required by law. In each case, the 
consultant found that they established a prima facie case in 
their charges. 

Now, this is not a final report. This is 



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preliminary. It's a result of ten — ten people that have been 
questioned. It's a result of one investigator who has been with 
state government for 30 years, who this very state used to do — 
used to use to conduct management audits on behalf of the state. 
He did it for 30 years. He did it for your Department of 
Finance. 

He's come and said, "Look, I applied your rules; I 
applied your criteria. I went and looked at this Department, 
and there's a problem, at least from what I can tell." 

Based on this, I would ask you to postpone the 
confirmation. Allow this to perhaps be developed in greater 
detail. Don't try it here. That's not what I'm asking, 
Senator, but allow the system to work. Maybe these minority 
employees are all wrong. Maybe this man has nothing to do with 
it. 

If he has nothing to do with it, I'll be the first 

I 

lone here to support getting another minority into state 

government. 

But he is at the source of the problem, then he 
shouldn't be confirmed. And that's all we're asking. 

MR. MARTINEZ: That's all? 

If I might just briefly. 

CHAIRMAN ROBERTI: Yes, Mr. Martinez. 

MR. MARTINEZ: I was not aware that the investigator 
was in, obviously. 

If I might ask, did you talk to anyone other than 
these ten employees? Did you talk to anyone in managerial 



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positions? 

MR. LEMMONS: Yes, but I didn't conduct any 
investigation in your agency. 

MR. MARTINEZ: Oh, I see. 

Again, I guess what I'd like to do is to say that 
maybe these things are true, and maybe they are not true. The 
only way we're going to find out, apparently, is not through any 

sort of resolution that I might have had an opportunity to 

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offer, but apparently it's going to be found out through some 
sort of formal process, whether it's through the FEH or the 
EEOC, because apparently these things have moved through. 

The State Personnel Board has been involved already 
in a number of these things, as has the Department of Personnel 
Administration, because in all cases of demotion that have been 
referenced up to now, it is the Department of Personnel 
Administration that has ordered the demotion on the basis — 
;:excuse me, I'm speaking — on the basis of their findings of 
lack of qualifications for those positions. 

Now, again, this is not the forum to deal with these 
things. I come here in order to be assessed in terms of my 
worthiness to carry out the responsibilities of the Department. 
Part of that is, in fact, to provide a forum for resolution 

seeking. 

i 

And I will reiterate that I have indicated and I will 
continue to indicate that I am willing to meet and discuss this 
with anyone. I've brought on board — unfortunately, she was 
not able to come on board until just recently, in fact Monday — 



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an individual who will be dealing directly with these things . 
If you want to talk to her in terms of what she intends to do, 
feel free to talk to Carmen. 

But again, there are a number of people that are here 
that want to talk about the Department as it existed prior to my 
being here, and the Department as it exists now, in terms of 
providing services to the constituency which it serves . 

We're dealing with diminishing federal resources. We 

i! 

don't have any general fund. We're trying to provide a 
mechanism by which these resources continue to be available. 

I am not in any way minimizing the concerns of 
counsel representing these individuals. They have resource. 
They have access. They have recourse. And I think that process 
should be allowed to ensue, and I would hope that you take their 
account and their presentation in balance with what apparently a 
number of other people, including 99 employees of my agency that 
have signed petitions saying that they support my confirmation. 

Apparently there ' s someone in the back who ' s making 
hissing noises, I guess. 

CHAIRMAN ROBERTI: Somebody was, but not right now. 

MR. MARTINEZ: So, I defer to the Committee. 

CHAIRMAN ROBERTI : I think there ' s one other person 
in opposition. Is there somebody else who wants to speak in 
opposition? 

Before we get to the proponents, I appreciate the 
seriousness with which the opponents take this matter, but it's 
a pending personnel case. That is our problem. 



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And both for economy of time, in all appointments 
that we engage in, and propriety when there's something that's 
pending, it's very difficult for us to get into pending cases. 

Senator Petris made a point that is very important. 
If there is a pattern of adjudicated, litigated, whatever the 
word, cases, or complaints that have reached some point of 
adjudication or frustration, then we feel it's within our 
purview in the confirmation process to acct. 

But this is the confirmation process, and we have to 
engage in some kind of restraint ourselves , respecting the 
division of powers as between the Governor and the Legislature. 
And I just don't know if I want to get into a current personnel 
case where a pattern has not necessarily been established. 

And that doesn't mean I am dismissing the seriousness 
of this issue. We have dealt with these issues quite seriously 
when we're talking about issues of minority employment. We are 
very serious about it when it comes to ourselves 

The other point is just a practical question of time. 
If we heard every personnel case, there's absolutely nothing 
else that we could ever possibly do. I don't know if I want to 
establish that precedence. Hearing from Senator Petris, he 
doesn't, either. 

If we had something other than what is pending, I'd 
be interested I hearing it. But it's very difficult to act on 
something that's pending on a serious matter, on a serious 
matter. I don't want to — 

MR. MARTINEZ: I fully accept the seriousness of 



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these matters. In fact, because I had an opportunity to finally 
take a look at these complaints, there are two complaints 
specifically that I've identified that can be, if not in part, 
in total, addressed by me. I have an opportunity to do 
something about them. 

They relate to the status of limited terms that has 
been designated as a result of the reorganization that I had to 
do. Two managerial employees were put into a status that the 
Department of Personnel Administration chose to call limited 
i term. 

I have since written to the Department of Personnel 
Administration, and I intend to appeal all the way to David 
Tirapelle about that status, because in the past, whenever we 
have reached a situation where there is — the staffing has 
changed such that there is a position, managerial position 
that's been jeopardized, we have been given an exemption that 
allows that individual to not — to be held harmless and put 
into a red circle situation. And I intend to do that in this 
case to the fullest extent, and I've so communicated to the 
: individuals. 

And I think — and those are the kinds of things that 
we can do. That we can do together. 

And again, I have been involved in state service for 
many, many years in a number of capacities. And I guess I'm 
very much bothered by a inference that, in some way, I am a 
racist, that I'm prejudiced, that I have some sort of a 
predisposition to people that are part of my culture that I grew 



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up with, in East Oakland, and I resent it, and I — but it 
doesn't mean that in any way I am going to adversely impact 
anyone who wishes to seek their legal recourse. 

All I am saying is that I'm willing to sit and meet 
and discuss any situation, because all things are possible when 
there's an opportunity for discussing and reconciliation. 

CHAIRMAN ROBERTI: Any other observations? 

Is there anyone else in opposition? Yes, please come 
forward. 

MR. ALCALA: There's also Art Jordan from BASS. 

CHAIRMAN ROBERTI: Let the record indicate that 
Mr. Jordan of BASS did want to come testify, but he is not here 
at the moment. 

Yes, please indicate your name. 

MS. CARTER: My name is Anita Carter. I am a 
resident of Sutter County. 

I guess I'm one of the individuals behind the mask, 
and I feel as though if I have something to say, I should step 
forward and look you straight in the eyes, and you look me 
straight in the eyes also, and look the Director straight in the 
eye and say what I have to say. 

I would like to direct this comment to Senator 
Petris, who talked about being — there was being a process to 
go through. 

I would like you to know that I followed that 
process. And what happened was, when I followed that process, I 
got — I received retaliation for it. I got a letter. I filed 



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a grievance with the Department. 

SENATOR PETRIS: Can you be more specific on the 
process? 

MS. CARTER: Okay. 

i 

I filed a grievance with the person — with the 

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Department of Personnel within our office, okay. And the 
grievance was denied, and then I asked for a process by which to 
go forward with that grievance. I was told that the Department 
of DPA would be the next step. 

But within the interim of me doing this and gathering 
information, I got a letter of warning that basically said I was 
crazy. So — 

SENATOR PETRIS: Who sent you the letter? 

MS. CARTER: My supervisor. 

SENATOR PETRIS: Who's that? 

MS. CARTER: Maxine Duriso. 

SENATOR PETRIS: Is she here today? 

MS. CARTER: Yes, she is. 

SENATOR PETRIS: We'll ask her some questions about 
it. 

Then what was the next step? 

MS. CARTER: Well, I think my — 

SENATOR PETRIS: Do you have that letter with you? 

MS. CARTER: No, we didn't bring it. I'm sorry. 

SENATOR PETRIS: What was the next step? 

MS. CARTER: I guess what I'm saying, I responded to 
her in that letter. I responded back with a response, okay. 



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And I was told within the letter that that would go into my 
personnel file for six months, okay. 

A lot of things contained in that letter were of 
meetings and meetings that never even occurred, statements that 
she said she made that were never made. There was no 
documentation that was ever given to me except — with the 
exception of that letter, you know. 

I received a probe where she did make some comments, 
and we did talk about that, and I certainly acknowledge that, 
okay . 

But I guess what I'm trying to answer, the point 
where the Director said that no one has come forward, and I want 
him to know that — yes, I want you to know that if I start a 
grievance, and somebody steps on my neck, I'm not going to come 
to you with the next grievance. So, I want you to know that. 

SENATOR PETRIS: Are there any other steps higher up 
that you were able to take, or did that end it? 

MS. CARTER: This — no, I'm not through — I'm not 
through with the official grievance that I filed with personnel. 
I'm i the process of filing with DPA and I intend to do that. 

SENATOR PETRIS: What you're saying is, you tried 
within the shop, and it didn't work. 

MS. CARTER: It didn't work. 

SENATOR PETRIS: And your rejection, the first filing 
of the grievance it was rejected. 

Were the reasons spelled out for the rejection? 

MS. CARTER: Well, they just said that the time limit 



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of my complaint had passed. 

SENATOR PETRIS: So that's not a rejection on the 
merits; is it? 

MS. CARTER: Well, I don't know, because the 
personnel officer said that the Department would never agree — 
would never find for me in my favor, you know. So, I was 
basically told up front that I could go ahead and file the 
[grievance, but it really wasn't going to do me any good. 

SENATOR PETRIS: Was that because the time limit had 
expired? 

MS. CARTER: Well, she didn't really say, because 
they hadn't done the investigation yet. You have to do an 
investigation . 

But as far as I'm concerned, in what I am — I am 
actually grieving, and I won't say what that point is, is that I 
am — the point that they made, and the point that I'm grieving 
are two different things, and so therefore I will pursue that. 

As far as filing the complaint with EEOC, I didn't 
really feel as though that I would have an empathetic ear from 
the Director. I don't have one — seem to have one from — I 
can talk — I thought I could talk to my supervisor, but 
evidently I don't feel comfortable going to her supervisor. 

And I just kind of feel as though there is a 
conspiracy within the office. I am a Black female, as you can 
see. And I've worked for this Department since December of 
1983. I have repeatedly been passed over for promotions while 
I've watched everyone else on that list be promoted, and bottom 



! 

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1 

iline being, all of a sudden, there's something wrong with me 



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behavior . 

As my supervisor is well aware, for the past year, 
I ' ve had Grave ' s Disease , and I ■ ve been going through that . And 

! 

I've been going up and down. 

So, instead of showing me a little empathy, they 
kind of kicked me in the butt . And that ' s the way I feel about 
it. 

Thank you. 

SENATOR PETRIS: You mentioned retaliation. Was 
there any in your case? Was there any retaliation? 

MS. CARTER: With my grievance — filing the 
grievance with DPA — with the Department? 

SENATOR PETRIS: Well, because of the fact that you 
did file a grievance, did — 

MS. CARTER: Yes! I got the letter. I filed the 
grievance, sir, on March the — 

SENATOR PETRIS: That doesn't seem — retaliation 
normally means they really come down on you hard. They might 
demote you. They might — 

MS. CARTER: You haven't read this letter, really. 

SENATOR PETRIS: No, I haven't read this letter, but 
I'm asking you about it. 

MS. CARTER: It — the letter — I don't sleep at 
night. I think about it all the time. 

SENATOR PETRIS: You don't have it with you? 

MS. CARTER: No. I wish — I really wish I did, but 



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;l — I hadn't really planned on saying anything. Okay, I really 

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ihadn't planned on saying anything, but I — I just feel as 

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'though that if I have something to say, then I should say it for 

{me . 

And I want you to know that this whole thing has 

really left me upset. I feel as though I am a victim. I feel 

as though my character has been defamed. I just don't know what 

to do. 
I 

SENATOR PETRIS: Do you think this is all due to the 

policies of Mr. Martinez? 

MS. CARTER: The Director, whether he knows of what 
is going on or not, whether he's aware of that, the buck stops 
there . 

SENATOR PETRIS: I suppose you probably can't tell 
for sure whether that information you sent on ever actually 
reached him? 

MS. CARTER: I don't know if he ever saw that. 

Did you ever see that letter that was prepared on me? 

MR. MARTINEZ: Again, I remember looking at a file 
that indicated the — well, several instances having to do with 
corrective action. And I saw that with a cover letter from — 
from the supervisor. 

But I don't know if I've seen the entire file. 

Again, I would have seen the entire file if she would 
have come forward and asked to see me. For that matter — 

SENATOR PETRIS: Well, I think I can understand — 

MR. MARTINEZ: That's fine. 



31 

i 

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SENATOR PETRIS: — can understand her position. She 

! 

starts a grievance, and then she really gets dumped on with this 

horrible letter. She has confidence in her immediate 

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isupervisor, but once she gets beyond that level, she gets 

(nothing but static . 

I guess if I were in her shoes, I wouldn't be too 
eager to come and see the boss, either. 

Isn't that a fair representation — 

MS. CARTER: Yes, yes. 

SENATOR PETRIS: — of the way you felt about it? 

MS. CARTER: Yes. 

I would also like to add that it was a surprise to me 
when I got this letter. I thought I had a very good 
relationship with my supervisor. She had told me a number of 

itimes that I was going to be promoted and not to worry about it. 

I ! 

And bottom line was, I was told, "You have a behavior 

problem . I am not going to promote you . " 

SENATOR PETRIS: What is your job classification? 

MS. CARTER: I'm an SSA, Staff Services Analyst. I 
have taken the associate program analyst class exam on three 
different occasions. I took it in 1986, 1989 ad 1990. 

SENATOR PETRIS: And you passed the course? 

MS. CARTER: Yes, I have always passed it. 

I guess what really sticks in my craw is that they 
went below me on the list and promoted a lady — a woman with a 
score of 70 and a rank of 5. Give me a break 1 You know? 

SENATOR PETRIS: That's, I assume, below your scores? 



32 
MS. CARTER: Yes, and it just isn't fair. 

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l| SENATOR PETRIS: Thank you. 

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MR. BOCANEGRA: Mr. Petris, you were asking for 

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Ppeople in opposition. 
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My name is Paul Bocanegra, President of CAFE 

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{Sacramento. It's an Hispanic Benevolent Employees Association. 

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You know, this is probably not the proper forum, and 

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I totally agree, to go into all the specific details. That's 



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why we provided some background information in regards to the 
affidavits . 

We're not here to try the EEOC complaints, okay. 
We ' re not here to try the State Personnel Board appeals or 
Department of Personnel Administration appeals . 

We're here to talk about in general the environment, 
the atmosphere that is existing there that started to occur, to 
happen, in less than a week's time form the time that Mr. Bob 
Martinez [sic] . 

Now, I want to say that I don't know if Bob could 
have accomplished all that within a week's time. I don't know 
that we could have talked about a reorganization in less than a 
week's time when he was appointed, sworn in, September 20th. 

So the question that we're asking is for postponement 
of this confirmation until we look into who is responsible for 
it; who approved it. 

Now, very briefly, you have this information in your 
package that was provided to you. Mr. Buzz Breedlove, with the 
Senate Research Planning Committee, I believe — I'm not 



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familiar with all the stakes which you have available at your 

disposal — but real quickly here, Fernando Vellanoweth, Manager 

of Financial Services, a Staff Manager I, was transferred into a 

misallocated one-year limited term position and replaced by a 

nonminority after being harassed by one of the folks in their 

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management team. 

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So, I don't want to get into personalities, but 

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Ithat ' s a fact. We can't shy away. We can't look away. It's 

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something that we feel very uncomfortable with. 

We would not be up here if we didn't feel, before 
you, in front of my family, to deal with these. 

Now, I can go on and on, but I would refer you to 
page 11, but just be patient with me on just two more things, if 
I may, please. And I know we have a lot of people that need to 
go , too . 

Mr. Russ Salazar, at the time he was our Chief of 

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Management Services, Staff Manager II. He has his authority and 
responsibilities significantly reduced. His position is now in 
jeopardy because it's been declared misallocated and changed to 

jla one-year limited term status . 

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In my particular case, I was the Department's Budget 

jjofficer. In fact, I don't know at this point in time whether I 

still am or not. I've been — I was transferred to a site I'd 

like to talk about in a second, and I was replaced by a 

nonminority. I've been assigned basically low-level accounting 

duties which are clearly not the duties and responsibilities. 

And I did go through the process, Mr. Petris . I did 






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go through the person that moved me around. I did go to the 

person and specifically say, "As long as I do duties and 

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(responsibilities consistent with my classification, you can sign 
ijwhatever you want . " Okay? 

And basically, I'm looking at real old work, '83-87, 
i to close out some contracts that accounting hadn't done, you 
know, since '83 in some cases. 

I will finish, sirs, by just sharing this with you, 
so that you know what's going on there. You decide for yourself 
if it warrants postponement, okay. 

I had scheduled surgery, and there was an assistant 
assigned to me to finish the Department's budget. There was 
about eight hours ' worth of work to be done in that budget to 
submit to Department of Finance, okay. At the time that I left, 
that's what was needed. 

So, upon returning from surgery, I was informed by 
Fernando Vellanoweth, my supervisor prior to surgery, that he 
was no longer my supervisor, and I was directed to a particular 
person — and I don't want to mention names. They have an 
opportunity to respond, and they will have their day. 

Anyway, I was directed to a work site that functioned 
as a storage area for accounting files. No personal computer, 
no calculator, no operational phone, or adequate furniture was 
provided. The work site housed a central computer terminal used 
by accounting staff and a communal coffee pot where accounting 
staff that contributed to a coffee fund, or individuals that 
paid 25 cents, could have brewed coffee. 



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I requested of this particular individual, which is 
part of the process — I did not look the other way. I went 
'forward — that I have another work site that was vacant with 
jproper equipment and furniture, but my request was denied. 

Now, I'm here. I'm speaking loud and clear. And I 
made no false allegations, because I cannot make statements and 
slander individuals, and I will not do that. And I don't want 
individuals to do that to me, either. 

But I feel that my reputation was damaged. My self- 
esteem was lowered. I was openly ridiculed for being kept at 
this work site. 

And I can go on and on, but I will stop there, and 
thank you for your patience. 

SENATOR PETRIS: Let me ask you a question. 

How long have you been in the Department? 

MR . BOCANEGRA : I ' ve been in the Department 
approximately two-and-a-half years. 

SENATOR PETRIS: Two-and-a-half? 

MR. BOCANEGRA: Yeah, it's in my affidavit here. 
Hopefully, I believe it was provided. We talked to Sherry. I 
believe she's with Mello's office. She's putting together the 
packages, or Roberti's, I forget. 

CHAIRMAN ROBERTI: Senator Mello's office, yes. 

I hate to say it, but the Democrats are going to be 
caucusing. 

MS. MICHEL: Some of the people who are here have 
come from out of town. 



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CHAIRMAN ROBERT I: I don't know what to do. We have 
a Democratic caucus to discuss the state budget, which is 
important, too. 

FROM THE AUDIENCE: We could stay here all night if 
we have to . 

MR. MARTINEZ: Mr. Chairman, I would be — you know, 
the confirmation — my concern is, obviously, everyone needs to 
find a resolution. 

And I am, as I said, you know, there are a number of 
things that were raised in regard to the — to the supposed 
investigation and findings. I mean, that's one-sided, fine. 

The process of the EEOC is going to determine the 
full record. 

We have not had an opportunity to comment on that, 

because the EEOC hasn't contacted us yet. Fine. They will 

'I 

eventually. 

In the meantime, there are a lot of concerns here. I 
am willing to meet and discuss these concerns with anyone, and 
I'm willing to report to the Rules Committee, or anyone else, 
about — 

CHAIRMAN ROBERTI: Here is what I guess I would like 
to do — but I know there are a number of people who are here to 
want to testify in your support — is that as long as I feel 
that this is still essentially a pending personnel matter, my 
inclination is to vote for confirmation. 

Nevertheless — 

[Applause. ] 



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CHAIRMAN ROBERTI: Please, please, please don't do 

that . 

Nevertheless, I think we owe it to the people who are 

here in opposition more to what they believe is a situation in 

your office, rather than you personally, for you to address 

their concerns . 

MR. MARTINEZ: Absolutely. 

I 

CHAIRMAN ROBERTI: I hope we can do that within the 
^eek. We take a vote up on your confirmation next Wednesday. 

I would like the people who are here in support to 
'indicate who they are, the organizations that they represent. 

If it looks like the confirmation becomes more 
difficult than I anticipate, then we'll do everything to make 
another hearing to expedite your travel up here, but I don't 
Ithink that's going to be necessary. 

However, I would like Mr. Martinez to meet with the 
opposition, because it goes more to the operation of the office 
than to you specifically. 

Now, having said that, could those who are here in 
support please come forward and tell us who you are and the 
organizations that you represent. 

Do this in some orderly fashion, if we can. 

FROM THE AUDIENCE: Are we going to be allowed a 
minute to speak? 

MR. ORTIZ: Just identify ourselves? 

CHAIRMAN ROBERTI: Yes. 

SENATOR PETRIS: Mr. Chairman, before we leave, may I 



38 

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ask the supervisor to make a comment on the letter? 

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Are you the one who wrote the letter? Can you stick 

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jlaround so we can ask you? Thanks. 

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CHAIRMAN ROBERTI: Please come, give your name. 

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MR. ORTIZ: My name is George Ortiz. I'm the 

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Chairman of the Board of Directors of La Cooperativa Campesina 

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.de California. 

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It ' s the second-largest service provider for poor 

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(people in the State of California. 

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CHAIRMAN ROBERTI: Thank you. 
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These are in support. 



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MR. JONES: Senator Roberti and Members of the 
Committee, my name is Michael Jones. I'm from Proteus, 
Incorporated, in — headquartered in Visalia, California. 

We represent services to farmworkers and other rural 
poor in Fresno, Tulare, Kings, and Kern County. 

I'm here in support of Bob Martinez. Thank you, sir 

MR. GONZALEZ: My name is David Charles Gonzalez. 
I'm an officer of the Association of Southern California Energy 
Providers, and we took a poll this morning of our 41 members, 
and overwhelmingly, 41 of those agencies all in support of 
Mr. Robert Martinez as the DEO Director. 

And I do take offense of thing I have to say to the 
Board. I want you to know that not all Hispanics feel like the 
ones that came before you feel that way. There's a lot of us 
that don't. And first of all, we're Americans before we are 
Hispanics. 



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39 

Thank you very much. 

SENATOR PETRIS: I have a question, excuse me. 

I didn't catch the name of your organization? Is it 
energy companies? 

MR. GONZALEZ: No, it's the Association of Southern 
California Energy Providers. 

SENATOR PETRIS: Energy providers? 

MR. GONZALEZ: Yes, it's a coalition of agencies and 
vendors who formed an association in Southern California. They 
be from San Luis Obispo to the border. 

SENATOR PETRIS: What is that, electricity, oil? 

MR. GONZALEZ: No, our members are agencies like 
TELACU, MODA VIA, ASSERT, Veterans of Community Service. They 
are subcontractors who do weatherizations, and a lot of them are 
CAP agencies for low income. 

And our association, the south, we also allow 
vendors. Edison is a member, and so is Southern California Gas 
Company . 

And it was overwhelmingly. We took a poll, and our 
Chairman couldn't be here, so I came in his behalf. It was 
overwhelmingly . 

Thank you. 

MR. MEYRELES: Mr. Chairman, Members, my name is Raul 
Meyreles. I'm the Director of La Cooperativa, and I'm in 
support . 

And I just want to remind the Committee that there is 
a much larger minority community which livelihood depends on the 



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40 
services provided to them, and instability in the Department 
could result in disruption of those services. And I will hope 
you take that into consideration. 

Thank you. 

MR. VAYS: Mr. Chairman, Senators, my name is Sigmund 
Vays, and I am the Chairman of the Legislative Committee for the 
Association of Southern California Energy Providers. 

As Mr. Gonzalez reported to you, the overwhelming 
support, confirmation for Mr. Robert Martinez. 

I would just like to point out to the press that, as 
a result of the riots in Los Angeles, time is of essence. 
People are suffering, low-income people, minority people are 
suffering. We need leadership. 

CHAIRMAN ROBERTI: Thank you. 

MR. RISLING: Mr. Chair, Committee, my name's Douglas 
W. Risling. I'm the Executive Director of the Northern 
California Indian Development Council, Incorporated, up in 
Eureka, California. 

I represent the primary contractor for the delivery 
of Indian set-aside funds in the State of California. We 
currently serve about 57 counties, and 96 Indian reservations 
and rancherias . 

And I would just like to offer our strong support of 
Mr. Martinez's appointment. 

SENATOR PETRIS: Question. 

Which county do you not serve? 

MR. RISLING: I'm sure you're quite aware of it, the 



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41 
burg of Los Angeles . 

[Laughter. ] 

CHAIRMAN ROBERTI: A little county. 

MR. FEARON: Mr. Chairman, Senators, my name is 
Gregory Fearon. I'm the immediate past Chairman of the Board of 
Sonoma County People for Economic Opportunity, which serves 
Sonoma County. We're the CAP agency for Sonoma County. And I'm 
a past staff member of Senator Peter Behr. 

I just wanted to say that I have watched the 
Department for a long time, and I have nothing but the greatest 
admiration for Mr. Martinez. I've seen the attitudes of the 
agencies in the community change toward the Department since his 
arrival, and I hope with all my heart that you confirm him. 

CHAIRMAN ROBERTI: Thank you. 

MR. AVILA: I'm Leo Avila. I'm the state Chair of 
the American G.I. Forum. 

I have a prepared statement that I've left for 
distribution to you in the interest of saving your time. 

We strongly support the nomination of Mr. Martinez. 
We're cognizant of the complaints that have been filed. We're 
sensitive to them, but in fairness to Mr. Martinez, we feel that 
he should be given an opportunity to work them out and continue 
to do the work that is necessary in that agency. 

Thank you for your time. 

MR. PARKER: Mr. Chairman, Members of the Committee, 
I'm William Parker, Director of the Economic — Community Action 
Agency of San Mateo County, and a member — and President of the 



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42 
Bay Area Poverty Resources Council. 

Both organizations strongly hope that you will 
confirm Robert Martinez as the Director of DEO. 

Thank you. 

MS. VAUTHIER: Chairman Roberti, Committee Members, 
my name is Barbara Vauthier, and I'm the Executive Director of 
Cal/Neva Community Action Association, the largest association 
of nonprofit service providers in California. 

I'm here on behalf of our President, Helga Lemke, who 
couldn't be with us. We very strongly support the confirmation 
of Mr. Martinez. 

Before Bob came to DEO, the problems that we had were 
unimaginable, and I have to say that Cal/Neva was responsible 
for the campaign to the Governor's Office to make a change in 
the directorship. 

We feel there has been a remarkable change in the 
communication, the cooperation. It's giving us the ability to 
provide the services to low-income people in California, which 
is what we're all supposed to be doing. We very strongly 
support the confirmation. 

CHAIRMAN ROBERTI: Thank you. 

Is there anybody else here? 

I'm going to have to bring the hearing to a close. 
Is there anybody here who is from out of city? Please raise 
your hand. I'll let you come forward. Anybody else is going to 
have to come back next week. 

All other confirmations will be put off until next 



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43 
week. 

I do have to attend the Democratic caucus, and when I 
leave, there will not be a quorum. 

Yes, please come forward. 

MR. EVANS: Thank you. 

My name is Jim Evans. I'm Executive Director of the 
Calaveras-Mariposa Community Action Agency, and also a member of 
the Board of Directors of the California Coalition of Rural 
Housing. 

And in both capacities, we have appreciated 
Mr. Martinez's administration. It increased funding for our 
rural housing stock that's badly in need of it. 

CHAIRMAN ROBERTI: Thank you. 

MS. MARTINEZ: Mr. Chairman, my name is Val Martinez. 
I'm the President of the Association of Rural Northern 
California Energy Providers. 

And I was coming today to offer our support for Bob 
Martinez's confirmation. Rural counties suffered tremendously 
under the previous Administration. Bob has shown a willingness 
to take on a leadership role in providing adequate funding for 
rural areas. For that, we greatly appreciate his efforts. 

And again, I would like to say, I thank you for 
giving us this opportunity to speak on behalf of him. I have 
our written testimony for your record. 

CHAIRMAN ROBERTI: You're welcome. 

MS. MARTINEZ: In closing, I would like to say that I 
think that it ' s important that employees be given a proper 



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44 
opportunity and a proper area to explore their grievances . And 
I appreciate the fact that you weren't willing to take that up 
today . 

CHAIRMAN ROBERTI: Is there anybody else from out of 
town? Please come forward. 

MS. DOHERTY: My name is Jan Kuris Doherty. I 
represent the City of Los Angeles Community Development 
Department . 

The City supports Mr. Martinez's confirmation for two 
basic causes. The first is that he has demonstrated leadership 
in establishing a true partnership between the service providers 
and the funding source, DEO, who could have otherwise been 
autocratic . 

And secondly, for the sensitivity that he has brought 
into the system, particularly in the fact of the City of Los 
Angeles, its administrative burdens, and in helping address the 
immediate needs of the City in response to the recent crisis. 

CHAIRMAN ROBERTI: Thank you very much. 

We will hold all other witnesses until next week. I 
would like the witnesses, however -- I wish they hadn't filed 
out — to indicate to the consultant that they were here so we 
ilcan reschedule them for the next week. If they were not here 
I today, they will not speak twice. 

FROM THE AUDIENCE: What time next week? 

CHAIRMAN ROBERTI: We meet Wednesday at 1:30. 

With that, Senator Mello has rejoined us; however, it 
1 probably would still be my preference that the Democrats meet in 



45 
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ilcaucus . 

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As you know, we have a major state deficit budget. 
We're meeting with the State Treasurer. It's important for us 
to get up-to-date information on that. It's unfortunate we 
|can't do all things at the same time. 

With that, we're going to adjourn until next week. 
We will take up rule waivers tomorrow on the Floor and items 
II that are going to be put over to that extent. 

We will adjourn until tomorrow on the Floor. The 
next regularly scheduled meeting will be next Wednesday at 1:30 

[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
4:20 P.M. ] 

— ooOoo — 



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CERTIFICATE OF SHORTHAND REPORTER 



I, EVELYN J. MIZAK, a Shorthand Reporter of 
the State of California, do hereby certify: 

That I am a disinterested person herein; 
that the foregoing Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel 
or attorney for any of the parties to said hearing, nor in 
any way interested in the outcome of said hearing. 



hand this 



Mt 



IN WITNESS WHEREOF, I have hereunto set my 
day of May, 1992. 



ZAK J> 



I^^evelyS J.^IIZAK 

Shorthand Reporter 



199-R 

Additional copies of this publication may be purchased for $5.00 per copy plus 
current California sales tax. 

Senate Publications 
1100 J Street, B-15 
Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 

Please include Senate Publication Number 199-R when ordering. 



5°° 



HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MAY 20, 1992 
2:20 P.M. 



DocuMt oa.PT. 
JUL 1 3 1992 



200-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



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Reported by: 


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Evelyn J. Mizak 


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Shorthand Reporter 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 20, 1992 
2:20 P.M. 



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APPEARANCES 

MEMBERS PRESENT 

SENATOR NICHOLAS PETRIS, Acting Chair 

SENATOR ROBERT BEVERLY 

SENATOR HENRY MELLO 

MEMBERS ABSENT 

SENATOR DAVID ROBERTI, Chairman 

SENATOR WILLIAM CRAVEN, Vice Chairman 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

ROBERT P. MARTINEZ, Director 
Department of Economic Opportunity 

JIM GORDON 

Communications Workers of America 

TOMMY FULCHER, Executive Officer 
Community Action Agency 
Santa Clara County 

JULIE WRIGHT, Director 
Department of Commerce 

NANCY C. GUTIERREZ, Director 

Department of Fair Employment and Housing 

ERIC D. VEGA, Executive Director 

Human Rights and Fair Housing Commission 

City and County of Sacramento 

LYDIA L. BEEBE, Member 

Fair Employment and Housing Commission 



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APPEARANCES (CONTINUED) 

T. WARREN JACKSON, Member 

Fair Employment and Housing Commission 

ARTHUR E. MADRID, Member 

Fair Employment and Housing Commission 



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INDEX 



Proceedings 



Governor ' s Appointees ; 

ROBERT P. MARTINEZ, Director 
Department of Economic Development 



Witnesses in Support: 

JIM GORDON 

Communications Workers of America 

TOMMY FULCHER, Executive Director 
Community Action Agency 
Santa Clara County 

Closing Statements by Nominee 

Motion to Confirm 

Committee Action 

JULIE WRIGHT, Director 
pepartment of Commerce 

Background and Experience 

Questions by SENATOR PETRIS re: 

Report Refuting Conclusions of 
Competitiveness Council 

Permitting Delays 

Arrogance of Local Clerks and Inspectors 

Oversight of Local Applications 
Office of Permit Assistance 
Local Justification of Conduct 

Functions of Office of Permit Assistance 

Complaint about City of Berkeley's 
Requirements for Rebuilding 



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Questions by SENATOR MELLO re: 



3 Stanford Report's Response to Competitiveness 

Council's Findings 15 

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Need for Better Data on Plant Closures 17 

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Workers' Comp. Rates Vs. Refunds 18 

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System for Identifying Plant Closures 19 

Motion to Confirm 20 

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Committee Action 21 

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NANCY GUTIERREZ, Director 

10 Department of Fair Employment and Housing 21 

11 Background and Experience 21 

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12 Witness in Support: 

13 ERIC VEGA, Executive Director 

Human Rights and Fair Housing Commission 

14 City and County of Sacramento 23 

15 Department Needs Resources to Ensure 

Compliance 23 

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Supreme Court's Decision on Negating 

18 |l Commission's Damage Awards 24 

19 Governor's Vetoes 24 

20 Statement by SENATOR BEVERLY re: 

21 Nominee Recipient of Pericles Award 25 

22 Motion to Confirm 25 

23 Committee Action 26 

24 Statement of Intent by SENATOR PETRIS to Put Over 
Confirmation Hearig of T. WARREN JACKSON 26 

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LYDIA BEEBE, Member 

26 Fair Employment and Housing Commission 26 

27 Background and Experience 27 

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Statements by SENATOR PETRIS re: 



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Development of Regulations regarding Family 
Leave Act 

Questions by SENATOR PETRIS re: 

Sexual Harassment in Workplace 

Peralda Decision 

Case Involving Four Complainants against 
Three Male Restaurant Owners 

Awards by Commission Unenforceable 

Request to Governor to Support Legislation 
Giving Commission Statutory Authority to 
Award Monetary Damages 

Governor in Support of Current 
Bergeson Legislation 

Motion to Confirm 

Committee Action 

^ARTHUR E. MADRID, Member 

;Fair Employment and Housing Commission 

Background and Experience 

Motion to Confirm 

Committee Action 

Termination of Proceedings 

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Certificate of Reporter 



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P-R-O-C-E-E-D-I-N-G-S 

— ooOoo — 

SENATOR PETRIS: Now we'll take up Governor's 
appointees whose appearance is required. The first one is 
Mr. Robert Martinez, Director of the Department of Economic 
Opportunity, put over from prior hearings. 

Are there any here who are going to testify? We've 

ihad extensive hearings before. How many? We have two. We'll 

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.ask each to keep their comments relatively short, because we 

fhave gone into this, both pros and cons, very extensively. 

Do you want to identify yourself and organization, if 
you ' re representing one 

MR. GORDON: Yes, Senator Petris and Members. 

Jim Gordon with Communications Workers of America. I 
also am a member of the Advisory Committee to the Department of 
Economic Opportunity, representing organized labor. 

And I sent a letter to the Committee in January 

indicating our strong support as labor for the appointment, or 

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confirmation of the appointment of Robert Martinez. And I just 

wanted to come for the record. I understand there was some 

opposition. 

I was unable to be here last week, and I want to 

state that that support remains strong, and in fact, since I 

wrote the letter, if anything has happened, my opinion has been 

strengthened in terms of the way he has been dealing with the 

Advisory Committee, and the way we see him operating and running 

the Department. 



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So, I just wanted to state that for the record; urge 

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your confirmation. 

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SENATOR PETRIS: Thank you, Mr. Gordon. 

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Any questions of the witness? 

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Anyone else in favor? 
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MR. FULCHER: Mr. Chairman, my name is Tommy Fulcher. 

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I'm the Executive Director of the Community Action Agency in 

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Santa Clara County. I'm also Vice Chairman of the Metropolitan 
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Chamber of Commerce in San Jose, and President of the Public 
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Affairs Council in Santa Clara and San Benito Counties. 
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I say that to indicate the breadth of my involvement 
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in my county and surrounding county, and to indicate that I'm 
aware of the breadth of DEO's involvement in our county, and a 
lot of agencies that they support and that they fund. 

I've been in this job about ten years, and I've had 
the pleasure to work with Mr. Martinez when he was Director some 
years ago. And I know that when he came in before, there were 
problems; when he came in this time, there were some problems. 

One thing that I can say about Bob is that he is 
competent, and that's something that we need more now than ever. 
The resources are thin. We have to be more accountable. 

Mr. Martinez, when he comes in, you can tell the 
difference in the way that the — the entire network that's 

involved with DEO responds. He's competent, and he's been fair. 

i 

He requires accountability, and, you know, I don't get to 

Sacramento that often. I don't like to come up here. But in 

I this case — 



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SENATOR PETRIS: It's not such a bad place, actually. 

[Laughter. ] 

MR. FULCHER: I like to stay home and do my job, and 
not come up here . 

But I thought this was important, to come up here, 
because we're in critical times now. We require good government 
managers, and that's what Bob Martinez is. And I just came up 
to offer my strong support for his appointment. 

SENATOR PETRIS: Thank you. 

Are there any questions? 

I hope you can tell the folks back home that you made 
;it alive out of Sacramento. 

[Laughter. ] 

SENATOR PETRIS: Now, are there any other witnesses, 
•either for or against? 

There being none, do you want to make any brief -- 

MR. MARTINEZ: Just very briefly, recognizing the 
Committee's time constraints, Mr. Chairman, just to reiterate 
that a number of the individuals that are represented here today 

;have submitted their comments, and I'm very appreciative of 

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those comments . And if it were not for the extreme time 
constraints, I'm sure they would be allowed the opportunity. 

We have members of our Advisory Commission here as 
well. 

SENATOR PETRIS: Why don't we have them raise their 
hands, those that are here in support? 

Are you all going to leave after this item? 



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MR. MARTINEZ: Yes, Mr. Chairman, quietly. They're 
going to leave quietly, Mr. Chairman. 

[Laughter. ] 
SENATOR PETRIS: You're not going to stick around? 

JThat ' s like the Budget hearings at the city councils. They get 

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a big crowd during the budget, and then they disappear the rest 



of the year. 

Well, that's all right. At least you're here this 



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one time. Welcome. 

FROM THE AUDIENCE: Two times. 

SENATOR PETRIS: Two times, yes. 

All right, the Chair is ready for a motion on this 

confirmation. 

I 

SENATOR MELLO: Move it. 

SENATOR PETRIS: Moved by Senator Mello. 

Secretary will call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

|| 

Senator Craven. Senator Roberti. 

I 

Three to zero. 



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SENATOR PETRIS: Thank you. 

Ordinarily, I would have asked to make the motion, 
because Mr. Martinez is from my home town, and I knew him long 
ago. 

MR. MARTINEZ: Thank you, Mr. Chairman. 

SENATOR PETRIS: We're recommending confirmation to 
ithe Floor. 

MR. MARTINEZ: Thank you, Mr. Chairman. 

SENATOR PETRIS: Congratulations. 
1 1 

[Applause. ] 

SENATOR PETRIS: All right, the next one we have for 

the confirmation process is Director of the Department of 

i 

Commerce, Julie Wright. 

MS. WRIGHT: Good afternoon. 

SENATOR PETRIS: This is your first appearance? 

MS. WRIGHT: Yes, it is. 

SENATOR PETRIS: We ask, the Chair always asks the 

nominee to tell us why you think you're qualified to hold this 

i 

position. 

MS. WRIGHT: Well, I've spent the last 25 years, 
virtually all of my career, in the private sector; most of it in 
high technology and aerospace. And I've been involved in two 
major areas: marketing and public policy. And as I look at the 
mission of the Department of Commerce, it has heavy involvement 
in both, particularly in the public policy arena in the last 
couple of years. 

I think that marketing the State of California is 



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chiefly the role of the Department of Commerce, and many of the 
efforts underway now in the Legislature and that we have been 
involved with are going to assist greatly in that task. 

In the ten months, eleven months, that I have been 

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here, I've taken a number of steps that I think enhance our 

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marketing efforts. And I'd be pleased to cover those, if you'd 

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like me to. 

I love California. I think it's a terrific state, as 

jl'm sure you do. And that's a key reason that I came. 
ii 

SENATOR PETRIS: There are about a half million 

people who disagree with you. They moved out last year. 

Does anyone have any questions? 

I had a couple, if I may. 

There's been a lot of literature in the last few 
months particularly centering around the L.A. Chamber of 

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Commerce study of the massive flight of industry and other 
^businesses out of California. A couple days ago, there was a 

different study published by a group called Policy Study 

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Committee on Economics, and something or other. I forget the 
|i 
name. They're in Palo Alto. 

MS. WRIGHT: Right. 

SENATOR PETRIS: And they refute in detail the 
conclusions of that L.A. Chamber report, and the Ueberroth 
report, and point to more traditional reasons, going way back 
twenty years. 

Are you familiar with that report? 

MS. WRIGHT: Yes, the — 



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SENATOR PETRIS: Pardon? 

MS. WRIGHT: Yes, I am. 

SENATOR PETRIS: Which ones are we supposed to 
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iibelieve? Is the answer somewhere in between? 

MS. WRIGHT: Clearly, the recession has been a major 
jcause of job loss in California. 

On the other hand, there have been literally dozens 
liof surveys done over the last couple of years, and what I have 
tried to focus on is what the consistent messages are in some of 

!! 

Ithem . 

When you look at something like the L.A. County EDC 

and the Aerospace Task Force assessments, we have concentrations 

of industries in certain parts of the state, and the messages in 
l| 
some of those areas are quite clear. 

I've tried to focus on the common denominators. And 

jjwhile I don't dispute what the — I think it's called the Center 

[for the Continuing Study of the California Economy — 

SENATOR PETRIS: Yes, that's it. 

MS. WRIGHT: — said about some of the reasons, I 

think they are incorrect to dispute the reasons that are 

^outlined in the Competitiveness Council's report and the others. 

Many of the issues that face California companies are 

quite measurable. The length and complexity of permitting 

times, for example, is just very clear and black and white. The 

cost to employers of Workers' Compensation is something that's 

also measurable. 

So, rather than try to pick apart some of the things 



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that are different in the various studies, I think we can look 
at what appears to be a continuing theme through most of them. 
And frankly, I think that's one of the reasons that there's so 
much movement in Sacramento this year to resolve some of the 
issues that we can all come to agreement on. 

SENATOR PETRIS: Is the permit delay primarily at the 
jlocal level or state agencies? 

MS. WRIGHT: I think there are issues in both, and in 
addition to delays, the biggest parts of the problem relate to 
the fact that the time is unpredictable. And of course for a 
business, we've just been dealing with an issue relating to a 
semiconductor company, where their product life cycles are so 
fast that taking a year or two to permit a facility, for 
example, would be absolutely unacceptable. 

I would also tell you that we have convened some what 
I call Red Teams to bring city, county, and state people 
together where it's^been necessary to get the decision makers in 
the room, and we can solve those problem on an individual basis. 

But what I think we need to do at both the local 
levels and the state level is to achieve a level of consistency 
and predictability in the process. 

SENATOR PETRIS: We've all heard the horror stories, 
and I've heard some over the years, including recent ones, that 
kind of drive you batty. ; 

It seems to boil down to an absolutely arrogant 
attitude of a clerk or an inspector. Most of the complaints I 
get are about inspectors, all different kinds. They seem to 



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take a lot of joy and delight in being a gladiator in an arena. 
And instead of trying to educate the applicant as to what's 
wrong and trying to be helpful, they like to drive that sword 
right through him first chance they get, and then make him come 
back and come back. 

The stories are, understandably, maddening to the 
applicant, which normally is a small business. 

Now, does your agency do any oversight or monitoring 

i' 

'of things like that? Do you get — suppose I were a businessman 
in this community, and I was given the run-around by the city or 
the county. In fact, I heard of a county case recently of a 
person who owned 1500 acres of land, wanted to carve out 150 
acres for a particular use. Based upon what he was told by the 
bureaucrats — I assume it's county; I'm not sure — it would 
take him $20,000 and four months just to carve out on paper 150 
acres . 

Now, that would just about blow my mind if I were the 
applicant. 

I wonder if any of them have come to your shop and 
said, "Hey, you're supposed to be promoting business in this 
state. They're driving us out and keeping others out." 

Can you do something to come down on them and make 
them accountable as a representative of the Governor? The 
Governor's policy has been stated over and over again: he 
doesn't like this, and he'd like to change it. 

MS. WRIGHT: Right. 

We are not vested with statutory authority to do 



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that. What I have done is, I have allocated — 

SENATOR PETRIS: Do you want some statutory- 
authority? 

MS. WRIGHT: The Governor — 

SENATOR PETRIS: I mean, I think there's some Members 
here who would be glad to see that you get it. 

MS. WRIGHT: The Governor's Office of Permit 
Assistance has that statutory authority. We work with them. 

What we also have done is, I have a couple of people 
on my staff who are very conversant. The primary area where we 
get involved is on environmental permitting. 

And so, what we have done is, I have a couple people 
on my staff who are very good in that area, and we've assembled 
what those of us from aerospace would call Red Teams, where we 
bring the right players together, and we cut through, and we try 
to deal with the policy issues and get to a prompt resolution. 

That's very labor-intensive. It's not a substitute 
for making the process clear and predictable in an of itself, 
but we have done that, and we really do it as an advocate for 
business . 

SENATOR PETRIS: What have you found in conducting 
those sessions of the Red Teams? What do the local people tell 
you that purports to justify the kind of conduct that we all 
know about and which upsets us? How do they justify it? 

MS. WRIGHT: Well, I guess we don't focus as much on 
justifying it as on trying to fix the processes and solve an 
immediate problem. 



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For example, last year we had a problem when a Bay- 
Area company, NUME, wanted to modernize a vehicle manufacturing 
line that, by the year 2000, would have them emit less volatile 
organic compounds than they emit today at 70 percent production. 
And it was a matter of getting Cal . EPA and the Air Resources 
Board, and ultimately the Bay Area air district, into the room, 
and it — they ultimately came up with an incentive to 
modernize, because they realized, I think, with policy makers at 
t^he table, that good public policy was cleaning the air, not 
penalizing people in the difficulty in getting from here to 
there . 

So, in all honesty, we haven't worked as hard to try 
to find fault, but to try and solve an immediate problem. 

Now, I agree with you, and several years ago, when I 

worked in a consumer-oriented part of my company, David 

Horowitz, noted consumer reporter, said, you know, it's a shame, 

but sometimes it's the lowest level of people, the lowest paid 

people, who really create the image of your organization. And I 

frankly think that within my own Department, we work on that, 

and we have tried to build a team effort. I think that's true 

throughout government at all levels. 
'i 

SENATOR PETRIS: What is the Governor's — what did 

you call it — Permit Appeal? 

MS. WRIGHT: It's the Office of Permit Assistance. 

SENATOR PETRIS: What do they do in the case of an 
individual grievance? Do they immediately consult the local 
agency involved — 



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MS. WRIGHT: Yes. 
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SENATOR PETRIS: — and discuss the problem? 
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MS. WRIGHT: I believe they do the same thing. They 

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have a broader mandate, in that they do land-use permitting, and 
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things like that. Where, in the business arena, we have found 
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virtually all of the issues relating to environmental 

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permitting. 

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SENATOR PETRIS: Let me walk you through a problem 
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and ask you how your agency would respond if the complaint were 
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made to you, and I guess you'd bounce it over to this other 



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office. 

But in the City of Berkeley, an 80-year old man lost 
his home in a fire. He decides to rebuild, which I think, at 
his age, is highly commendable. I mean, if I reached his age, I 
wouldn't buy any more green bananas, you know. 

[Laughter. ] 

SENATOR PETRIS: And here he is, building a house all 
over again. 

He goes to the City with his architect, and they put 
him through the hoops, everything he's supposed to do, and he 
thinks he's ready to go. One of the requirements is that he has 
to get 40 signatures of neighbors approving the plans for his 
house, forty. So, he does it. 

And he goes into the agency with his architect. And 
this person with the kind of attitude I'm talking about says, 
"Well, you've got a problem here." Even though they had met and 
talked about it before, now he springs a new one on him, and he 



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says, "You've gotta move this line three feet, the garage," I 
guess three feet back, a setback. 

So, the architect, who's sitting there, to save time 
he says, "Fine." He takes a ruler and he draws it three feet, 
and he puts it on his own copy of the plans, and he says, 
"Done. " 

Do you know what he told them? He says, "Well, now 
you have a whole new set of plans . This is not the original 
plan. You got to go out and get 4 signatures again, " because 
of what this guy told him to do, three feet. 

Now, when I heard that, you know, I just went 
bananas, if you'll pardon the repetition. 

[Laughter. ] 

SENATOR PETRIS: But anyway, if I came to you with 
that problem what would you do? 

MS. WRIGHT: Well, of course, our focus — 

SENATOR PETRIS: I know it's not your jurisdiction. 

MS. WRIGHT: Right. 

SENATOR PETRIS: But after getting all upset, what 
would you advise me to do? 

MS. WRIGHT: What we would normally do with a 
business is, we would try to intercede in the local community, 
often working with our local economic development counterparts, 
because what we are talking about is a very labor-intensive 
action. 

What we ' ve been trying to do in commerce on a broad 
scale, because we are just not equipped to be able to handle — 



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help every company in the state, is, we've tried to deal with 
these issues on a more generic basis, if you will, in working, 
in our case, with local economic development organizations and 
local governments. So that we appreciate the issues that local 
regulations and fees and assessment put on business. 

I think it is a business climate issue insofar as 
there are recent studies that show as much as $40,000 in the 
cost of a home relate to regulatory oversight. And that makes 
it more difficult for California to have the kind of affordable 
housing that will help us attract businesses to the state in 
many areas of the state. 

I share your concern, and I come from an industry, 
aerospace, that has embraced the approach called "total quality 
management," where it's really a see-change in the culture of an 
organization. And I think it's not easy, ad it's not done 
quickly. 

I ' m trying to do that in my own Department , and 
trying to do it in the processes that we come in contact with. 

I don't know the answer to your question, except I 
think it needs to be done at all levels in California. 

SENATOR PETRIS: Maybe we should have some 
legislative committee hearings around the state, and bring 
people like this who say, "Now you've got to get another forty 
signatures," bring them up to the hearing and say, "What in the 
world are you doing this for? How can you possibly justify it?" 

The answers I've heard are, "Well, it's the 
i; Legislature. They pass the laws." And you look for the law, 



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and you can't find it. 

MS. WRIGHT: Yes. 

SENATOR PETRIS: First of all, it's an ordinance, and 
their application of the ordinance is such that you can't 
recognize the ordinance. 

I'm willing to bet anything that there's no ordinance 
that that required this fellow to do what he did in that 
particular case. That's just his own smarts, you know. 

Any other questions? Senator Mello. 

SENATOR MELLO: I just want to follow through briefly 
on the point you were raising, making. 

Did you happen to see the report made by two 
professors from Stanford? Their response to the Peter 
yeberroth, the Commission's report on California 
Competitiveness. It was in yesterday's L.A. Times , I believe. 

MS. WRIGHT: Yes, I did see that. 

SENATOR MELLO: Let me explain to the Committee what 
I think they said. Less than five percent of the moving of 
business out of California/ and also decline in business, is due 
to laws in California and things that we do. They said 95 
percent is due to the recession, the national recession that's 
happening. And within that 95 percent is also competition from 
other countries and other — within the state. 

But they say, I mean, everybody's saying we've got to 
cut Workers' Comp; we've got to do this; we've got to do that. 
We have too many permit systems . 

But this report, and I thought it was well written, I 



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looked through it to try to see whether or not it ' s credible or 
not, but I thought they made some excellent points in rebutting 
what the Ueberroth Commission said, trying to put the blame on 
California for this loss of jobs. 

I'd like to hear your response to that. 

MS. WRIGHT: Let me respond to that in a couple of 
ways . 

Number one is, it has been very difficult to measure 
specific flight from California. We've wrestled with that 
within the Department, and we have looked at, for example, 
looking at Dunn & Bradstreet address changes, looking at the EDD 
ES-202 data, which is restricted because it's confidential, 
looking at our own data collection program which, in a similar 
program in New York, required six people that I don't have to do 
it. 

So, some of the business flight data is anecdotal. 
Some of it is done in surveys, where people talk about 
intentions . 

My concern is that, while I think some of the issues 
raised in the Stanford report have merit, I don't agree with 
their criticisms of the Competitiveness Council Report because 
— a couple of reasons. One is, I hear too frequently about 
business plans to leave. I've been in the head-to-head 
competitions with other states, where companies are making 
choices and doing the kind of bottom-line analysis that says 
whether they can afford or desire to be in California and be 
competitive in California. 



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And thirdly, I think we're looking at issues like 
biotechnology, where the decisions about whether to manufacture 
in California are made on a plain sheet of paper. These will be 
green field start-ups, and they have wide open choices about 
where they can site their facilities. 

And I think that for us to try and dismiss issues 
like permitting and Workers ' Compensation as not being the major 
part of the problem, they are, to my mind, de facto , the major 
part of the problem if they are a reason cited for a company 
building a new facility, expanding, or relocating outside of 
California. For those companies, those are the reasons. 

That is not to take away from the impact of the 
recession on California. Certainly that, and the fact that we 
have had the impacts of the DOD budget cuts, have had a 
significant impact on the state. 

But it also says that in a high growth economy, when 
your return on sales is 10-15-20 percent, that the fact that 
Workers' Compensation may cost you little more is a nuisance. 

When you're cutting costs and worried about staying 
in business and being profitable, the fact that Workers' Comp. 
is costly in California is a much bigger issue. And I think 
that ' s one of the reasons in the last couple of years that these 
issues have really been voiced over and over again, because our 
companies are struggling with the effects of the recession. 

SENATOR MELLO: The thing that's hard to believe is 
that we don't have better data as far as plants leaving 
California, because I think if you call each of the 50 counties, 



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someone knows . 

I know in my area, Green Giant when to Mexico with 
about half of their operation. Tri Valley Growers closed up, 
Sumplot Foods. I can give you a list of who they are, because 
I'm watching them very close and concerned about them. 

But they didn't go because of California's business 
climate. They left because they can hire workers in Mexico for 
$3 an hour — 

SENATOR PETRIS: It's 85 cents in their case. 

SENATOR MELLO: Yeah, instead of what they're paying 
here, you know, a lot more. 

MS. WRIGHT: Right. 

SENATOR MELLO: So, somebody ought to have this 
information. If these plants close down, you call up any EDD 
office in the whole state, they ought to know, because these 
people come in and start either applying for EDD help and 
assistance, or unemployment. But now, that's been told to me 
several times . 

The other thing about Workers' Comp. that's come to 
my attention — well, as an employer, I know this happens, but 
I've been forgetting about it — they've been saying how high 
Workers' Comp. rates are. One firm showed me a million-and-a- 
half dollars, what his Workers' Comp. was. And as we get 
talking and talking, I said, "What was your net cost?" Because, 
if you have a good safety program, then you get a refund at the 
end of the year. Well, his cost was $600,000, which is still a 
lot of money, but when you compare that to one-and-a-half 



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million, he was making a big case about one-and-a-half million, 
but actually his out of pocket cost is 600,000. 

That's the kind of message I'm hearing from people. 
They're not telling us what is their net cost. If you're 
putting up a deposit, that's one thing. What is your cost? And 
that's what I hear in Workers' Comp. 

Sure, it's got some — we ought to clean it up. It's 
the highest cost, lowest benefits, and it's poorly administered, 
I think. And that hasn't been the fault of the Legislature. 
George Deukmejian and his Director there for the Department of 
Industrial Relations, Mr. Rinaldi, I mean, they just felt the 
way to fix Workers' Comp. is to let it go down and be destroyed, 
then you start building up from the beginning. 

But it's been a horrible mess, and I don't know 
whether this Administration's going to do anything with it or 
not, other than say they want to cut down the premiums by $3 
billion. 

But I think there's more worse, within the system, 
there has to be, you know, get rid of the fraud and do something 
about the workers' benefits along there, too. 

MS. WRIGHT: Yes, that's true. 

SENATOR MELLO: Just answer, because we want to move 
along, can't you come up with a system to know what these plant 
closures are, losing jobs here? 

MS. WRIGHT: The EDD ES-202 data is confidential. 
We've explored — 

SENATOR MELLO: When plants close, that's 



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confidential? 

MS. WRIGHT: Well, and it's not always due to a plant 
closure. It can be a cutback. 

What we are doing is, we're looking at the Board of 
Equalization data on sales and use tax permits. And I think 
what we're going to do is to draw a small group of people 
together and see, because most of the avenues that we've 
explored either have a significant cost in outside fees or in 
labor to the Department. And we're trying to find a way that 
will be credible and consistently reliable data over time. And 
thus far, the Board of Equalization sales and use tax permits 
would appear to encompass the majority of businesses within the 
state. 

SENATOR MELLO: We've got to find a bureaucracy, 
somebody ought to know when there's a plant closing down. 

Well, thank you. 

SENATOR PETRIS: Any other questions? 

Senator Beverly moves the confirmation. 

SENATOR BEVERLY: Yes, and I'm pleased to do so. 
I've known Ms. Wright for some years in her position with TRW in 
Redondo Beach. She's an excellent woman, a hard worker, and a 
gredit to the Administration. 

SENATOR PETRIS: Okay, call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 



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SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 
Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti, 
Three to zero. 

SENATOR PETRIS: Your confirmation's recommended to 



the Floor 



MS. WRIGHT: Thanks very much. 

SENATOR PETRIS: We'll go to number four, Director of 
the Department Fair Employment and Housing, she's here. I 
understand you have a time problem and you have to run, so we'll 
take you out of order. 

MS. GUTIERREZ: Thank you. 

SENATOR PETRIS: Just tell us why we should approve 
your confirmation, okay? 

MS. GUTIERREZ: Okay, I sure will. Thank you. 

My name is Nancy Gutierrez. I feel that I'm uniquely 
qualified to fill the position of Director of the Department of 
Fair Employment and Housing. 

My personal and professional commitment to civil 
rights has been clearly demonstrated over the years. I bring 
over 30 years of management experience in the private sector. I 
have five brothers and no sisters, so I think you can see why 
equality issues have always been important to me. 

I joined the Bell System as an operator and moved 



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Steadily up through the ranks, retiring as Director of Human 
Resources in 1991. I've held various line and staff management 
positions in disciplines as diverse as technical, customer 
service, marketing, operations, and fiance. 

So, in addition to my corporate experience, I also 
have been a very active member of the community, with special 
emphasis on educational and developmental issues for 
under-represented minorities and women. I'm a member of the 
Board of Directors of the National Women's Employment and 
Education Foundation, the Society of Hispanic Professional 
Engineers Foundation, Leadership America, National Network of 
Hispanic Women, and Angeles Girl Scouts, in addition to numerous 
advisory boards . 

I've been the recipient of and complemented by 
numerous awards in recognition of my work in the field of human 
resources and valuing diversity. 

I believe that effective leadership inspires others 
to reach beyond themselves to accomplish greater goals. My 
background, skills, and demonstrated commitment to civil rights 
give me the tools to translate ideas and visions into actions 
and meaningful contributions to the people of California. 

My experience as a successful minority woman in a 
major corporation has given me a perspective on both the needs 
of business and the rights of workers. I respectfully ask for 
your confirmation so I can continue as Director and provide the 
strong leadership to the missions of the Department. 

SENATOR PETRIS: Thank you. 



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MS. GUTIERREZ: Thank you. 

SENATOR PETRIS: Are there any questions or comments 
by Members of the Committee? 

Anyone care to testify for or against? 

MR. VEGA: Good afternoon. My name is Eric Vega. 
I'm the Executive Director of the Human Rights and Fair Housing 
Commission of the City and County of Sacramento. 

On behalf of the Commission, I'm here to support 
Nancy Gutierrez. Our Commission on a daily basis hears the 
stories and complaints; things like, "Please help me. I'm being 
sexually harassed." "Please help me; I was beaten up, and I'm 
African-American, and they beat me up because of that." 
^Please help me. I'm in a wheelchair, and they won't give me 
access. " 

And we try to help those people, but often times what 
it ends up is that we refer it over to the Department of Fair 
Employment and Housing. And I know that Nancy Gutierrez, and 
Earl Sulloway, and the people in leadership there, make a strong 
effort to address those kinds of issues. 

But I did want to say that Nancy Gutierrez cannot do 
her job if the resources are not there to do the job. And the 
pepartment is continually suffering from budget cuts. 

I just wanted to make notice of a couple of things. 
In 1990-91, a $14 million budget was slashed to 2.15 for 1991 
and '92. And the Office of Compliance Programs was shut down, 
eliminating monitoring of 7,000 state contractors, and it goes 
on and one, and a number of people have been laid off, et 



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cetera. 

The key point that I wanted to make was that budgets 
— budgets are a civil rights issue; that equity costs. Equity 
costs. And unless Nancy Gutierrez is given the kind of 
adequate resources to investigate and to bring people into 
compliance, the racism, and the homophobia, and sexism that 
plagues our society will continue. 

And I guess I wanted to leave it by saying that I 
hope you can, in confirming her, send a message to the Governor 
that it's not enough to simply extend a smile or say some words 
about opposing discrimination. It's important to put the 
resources and the teeth behind the smile to make civil rights 
enforcement a reality in California. 

SENATOR PETRIS: Well, we've been trying to do that. 
We've been passing bills strongly supported by the Commission, 
composed of appointees of Governor Deukmejian, all of them drawn 
from business, to beef up their powers, which the Supreme Court 
said they didn't have, to award damages, especially in sexual 
discrimination cases and harassment. That's been the worst 
problem of all in the last few years, and we can't do anything. 

There are some horror stories that came out of my 
county, where they got excellent awards from the Commission. 
They were stricken by the Supreme Court. It's an outrageous 
condition. 

I've had bills to correct it. Deukmejian vetoed 
them- Senator Bergeson has had bills vetoed by Deukmejian and 
more recently vetoed by Governor Wilson. 



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So, I don't know what we have to do to send a 
message. We got tremendous support from both parties, and both 
men and women in the Legislature, and we didn't get anywhere. 
We'll have to keep trying. 

That will also help her do a better job and the 
Commission itself. 

MR. VEGA: That's right. 

SENATOR PETRIS: Thank you. 

Any other witnesses either for or against? 

Do I hear a motion? 

SENATOR BEVERLY: Mr. Chairman, one comment. 

I note that in 1985, Ms. Gutierrez won the Pericles 
Award. That should interest you. 

SENATOR PETRIS: Can I vote twice for her? 

[Laughter. ] 

SENATOR BEVERLY: I move approval of the 
confirmation. 

SENATOR PETRIS: Okay, we have a motion. 

Congratulations on the Pericles Award. 

MS. GUTIERREZ: Thank you. 

SENATOR PETRIS: Call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 



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Senator Petris . 

SENATOR PETRIS: Aye, Aye. 

[Laughter. ] 

MS. GUTIERREZ: Thank you, thank you. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

SENATOR PETRIS: That nomination is recommended to 
the Floor of the Senate. 

Thank you. 

Let's take a five-minute break. 

[Thereupon a brief recess was taken. ] 

SENATOR PETRIS: We will resume as a subcommittee in 
order to move along. We're losing a lot of time. 

Let's ask Ms. Lydia Beebe, Fair Employment and 
Housing — I think, in fact, why don't we have all three come 
forward. We could save a little time. Pull up an extra chair. 

Mr. Jackson is outside, I guess. 

Mr. Jackson, do you want to come up front? 

I thought we'd bring all three up and save a little 
time. 

In Mr. Jackson's case, we got last-minute expressions 
of concern. I guess you've been told about it. 

MR. JACKSON: Yes, sir. 

SENATOR PETRIS: We're going to ask that 
consideration of your appointment go over so the people who came 
in to see us at the last minute will have a little more time to 



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get information. 

It doesn't necessarily mean something's going to go 
awry at the hearing. It could, but this is not an unusual 
request. It's done quite frequently. I just want to reassure 
you to that extent. 

In fact, maybe you and I could talk sometime in 
between now and the time of the next meeting. 

MR. JACKSON: I would appreciate that. 

SENATOR PETRI S: Okay. 

So, we're going to excuse Mr. Jackson. You're 
welcome to stay and watch the proceedings, but we won't be going 
into questioning of you at this time. 

Now, Ms. Beebe, can you tell us, following our usual 
pattern, why you feel you're qualified to be appointed? 

MS. BEEBE: Surely, Mr. Chairman, Senator. 

My name is Lydia Beebe . I ' m a lawyer from San 
Francisco. I have worked for the last fifteen years for Chevron 
Corporation in a variety of assignments, most of which have been 
in the public affairs, government affairs, and tax areas. 

Throughout those years, I have spent a great deal of 
time working on public policy issues, legislation, and 
regulations. This is experience that I think will be very 
valuable to the Commission, and in some cases, already has. 

The main project the Commission has had to work on in 
the five months since I was appointed by Governor Wilson has 
been the development of the regulations concerning the Family 
Leave Act that was passed by the Legislature last fall. 



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I was one of three members of the subcommittee that 
worked on those regulations. I think our subcommittee met four 
times to consider the regulations. The Commission itself met 
another three or four times, took some public testimony. We 
received numerous written comments, and did publish the 
regulations in proposed form last month. 

As a Commissioner and as a member of the 
subcommittee, I must say I was pleased both with the process 
that we used and with the regulations that we published. We've 
received a lot of very positive comments about the openness of 
the proceedings and the fact that the proposed regulations were 
indeed thoughtful. 

And we certainly look forward to the opportunity to 
continue that process as we try to finalize those regulations. 

From a personal point of view, I guess I should add 
that I was delighted that the first issue that I worked on as a 
Commissioner had to do with the Family Leave Act. I think the 
women's issues or the issues of women in the workplace are the 
ones certainly that I have the most personal experience with. 
And as a working woman, and as a working mother, with my 
experience in corporate America, I guess I think that will be 
very helpful to the Commission in our trying to balance the 
needs of the employees and the employers in our state, and 
trying to work out a balance between those needs . 

My first invitation to speak as a member of the 
Commission was to address the California County Councils on the 
gender bias issue. I was delighted to accept that invitation 



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and do look forward to those opportunities to try to raise the 
awareness of people in our state about the gender and other bias 
issues in the workplace. 

I guess the last thing I wanted to add was, in this 
kind of difficult economic times, I think it's really crucial 
that our state remain committed to equal opportunity and freedom 
from discrimination, and in those few months that I've been 
involved in the Commission, I've come to the conclusion that the 
Commission and its staff is quite a dedicated group of people 
who really make a great effort to further those objectives on a 
rather small budget. 

I was personally flattered to be appointed to this 
important Commission, and I would appreciate your support of my 
confirmation. 

SENATOR PETRIS: Thank you. 

I've got another problem. I have to leave again for 
just a few minutes to see some people upstairs. Can we take a 
break? 

SENATOR BEVERLY: Another recess? 

SENATOR PETRIS: Yes, unfortunately, but I have some 
questions I want to ask, and I think maybe the other Members do, 
too. 

[Thereupon a brief recess was taken.] 

SENATOR PETRIS: The meeting will come to order. 

We just finished your statement. Since we're 
hearing you together, will you make your statement, Mr. Madrid, 
and then we'll ask you both questions. 



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MR. MADRID: Thank you, Mr. Chairman. 

For the record, my name is Arthur Madrid. I reside 
in La Mesa, California, which is in east San Diego County. 

Equal opportunity, and equal housing, and good will, 
and harmonious relationships between all the peoples of 
California has always been a keen interest of mine, and to that 
end, I have participated in a variety of activities as a 
volunteer and as a professional. For example, I served a number 
of years on the Human Relations Commission for San Diego County. 
I was the Chair and served for about four years on the Human 
Relations Commission for the City of La Mesa, which is where I 
reside. I also served on the Heartland Human Relations 
Commission, which addressed a variety of issues dealing with 
discrimination of all matters. And more importantly, some 20 
years ago, I was one of the charter founding members of an 
organization in San Diego County that's considered to be the 
best social service organization for Hispanics, it's called the 
Chicano Federation. 

I think one of the concerns that we have is that 
discrimination, whatever the degree is, is a great imposition 
not only to those individuals being affected, but also to the 
whole State of California. And I think what the Commission is 
doing at this point is addressing to the best of their ability 
these various issues. They're very complex, and they're very 
complicated. 

I was appointed, and I've been in office since 
January of this year. I've participated in the various pieces 



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of legislation in terms of hearings that have occurred. 

And I feel that perhaps the experience that I bring 
would certainly add a dimension that would be essential and, 
hopefully, productive to this Commission. 

Therefore, I ask that you support my confirmation. 

SENATOR PETRIS: Do we have any comments or questions 
from the Members of either nominee? 

If not, I'll have to ask a couple. I'll try to make 
them as quick as I can. We're in bad shape o time today. 

I've been very concerned about the problem of sexual 
harassment in the workplace. It's reached a terribly degrading 
level with a lot of horror stories. Now, that's in your 
bailiwick. 

As I indicated earlier, I carried legislation to 
correct it and didn't succeed, and Senator Bergeson has tried 
twice, and she hasn't succeeded. 

I want to cite a couple of the cases. The issue is 
whether the Commission has statutory authority to award damages, 
either compensatory or punitive. The court knocked both of them 
out, as I recall. 

So, the court says to us: put it in a statute. And 
we've been trying. Senator Bergeson and I've been trying. We 
just can't seem to get there. 

Here's a case involving a Black female secretary who 
was sexually harassed by her supervisor, the dean of the school 
that she worked in — in fact, it's in my county — for six 
months. The Commission awarded $20,000 in compensatory damages 



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for emotional injury. Because there was no back pay at stake in 
this case — and there never is. They just quit and leave, you 
know, or they hang on. They get paid, but they also get the 
harassment. 

The effect of the Peralda decision is that the 
complainant will receive no monetary remedy for the harassment. 
That's case number one. 

Here's one involving a restaurant in my county. This 
:is unpleasant, but I'm so infuriated by this when we run into a 
st^one wall, that I'd like to get your reaction, and I want to 
get your help if you agree with me. 

The Governor appointed you. You have some connection 
with the Governor. I'd like you to talk to the man, okay, and 
maybe I'll send you these. 

Four complainants, all waitresses, were sexually 
harassed by three male owners of a restaurant: 

"They slapped, pinched, and grabbed 
the women's breasts and buttocks 
continually. One of them lifted the 
skirt of one of the women with a 
loaf of French bread and tried to 
put it between her legs . They would 
shape hamburger meat in the form of 
a penis and testicles and ask the 
women if they were big enough. One 
of the men pinned one of the 
complainants to the ice machine, 



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telling her that he wanted to have 

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sex with her. Another tried to 

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force one of the women to have oral 

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sex with him, and she felt forced to 

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quit her job. " 

So, they filed their claim, okay? Award: $5,000 

each for three of the women, and 30,000 for the fourth one. 

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The awards are now unenforceable. Personally, I 

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think those awards are crummy in amount, to be subjected to 

that. I mean, if that happened to a man, the man would have 

killed the assailant. A lot of men would have. 

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Nothing happens . They go through the torment and 

delay of the process, and they finally get an award. 

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The Supreme Court says the Commission has no 
authority to give this award. It's not in the statute. So 
they have nothing. And there's no back pay, where you have a 
case in other kinds of employment grievances, where the 
employee is entitled to back pay. In this case, there's no 
back pay involved, so they don't get anything. 

There's three or four others of equally degrading 
content. 

Now, my request is — and I'll send you these — if 
you agree that this is a terrible situation and has to stop, 
and that the complainants, employees, ought to be able to come 
before your Commission and file their grievances, and get 
just relief, or else go to court — the whole object of the 
Commission was to avoid a lot of court fights. Everybody 



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agrees to that. The expense and delay and clogging up of the 
courts, this is what it was for. And they're not getting 
satisfaction there. 

So, I would like the Governor to review this 
problem and maybe change his mind on this kind of legislation. 
Hopefully, he'll not only sign the bill, but he will make some 
public statement supporting it. 

I don't know whether Senator Bergeson is going to 
try it again or what. I don't know if there's any bill pending 
right now, but there's always next year. 

Are you familiar with the background in these 
cases, or did these all happen — 

MS. BEEBE: These all happened before, I think, 
either Art or I were appointed, but we are familiar with them 
and the damages . 

SENATOR PETRIS : What ' s your reaction? 

MS. BEEBE: Well, I guess I would say, speaking for 
myself, I know the Commission has in the past endorsed specific 
damages legislation. I believe the Commission and I personally 
am in favor of damages legislation. 

I believe the Governor has also endorsed the 
current Bergeson bill, which I think is in committee. I guess 
we're all hopeful that there can be some resolution of the 
damages issue. 

I think there is a real realization that the 
Commission doesn't have much power without the ability to award 
some damages. I would hope you keep trying this year. 



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SENATOR PETRIS: He voted for similar legislation 
when he was in the U.S. Senate, not exactly the same, but same 
general idea. 

Now you're saying he is in favor of the current 
bill? Because last year, he vetoed Senator Bergeson's 827. 

MS. BEEBE: He vetoed 827 last year. 

It's my understanding that Senator Bergeson's bill 
this year contains some step caps that are sort of modeled 
after Title 7, which the Governor thought was acceptable, and 
they do have a bill. 

SENATOR PETRIS: Yes, one of the issues was putting 
a cap on the amount, and so forth, which in the beginning, 
Senator Bergeson thought was unacceptable. It was just too 
darn low; it wasn't worth the effort. Might as well go to 
court and get a much bigger verdict from a jury. 

And that's the reason the Commissioners, all 
appointed by Deukmejian at that time, believed it would be 
better to beef up the Commission, give them a right to grant 
some damages. Otherwise, the business community would be 
subject — those of the bad guys within the community. I'm not 
saying the whole community. A very, very tiny percentage — 
would be subject to much bigger judgments than they would get 
ir* a Commission. 

Okay, I've had my say. 

Any questions? Hear a motion? 

SENATOR BEVERLY: Move individually? 

SENATOR PETRIS: Yes. 



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SENATOR BEVERLY: Move approval of the nomination 
of Lydia Beebe. 

SENATOR PETRIS: Excuse me, I didn't ask if there 

are any witnesses to testify either for or against. 

Okay, we have a motion for Ms. Beebe. Call the 
roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris. 

. SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

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SENATOR PETRIS: Okay, that's recommended for 
confirmation . 

Congratulations . 

SENATOR BEVERLY: Same motion on Mr. Madrid. 

SENATOR PETRIS: Same motion on Mr. Madrid. Call 



the roll. 



SECRETARY WEBB: Senator Beverly. 
SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 
Senator Mello. 



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SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti 

Three to zero. 

SENATOR PETRIS: That's approved also. 

Good luck to both of you. Your confirmation will 
be done on the Floor. If they follow our recommendation, 
you're in officially. 

MR. MADRID: Thank you very much. 

MS. BEEBE: Thank you. 

[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
4:00 P.M. ] 

— ooOoo — 



38 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of 
the State of California, do hereby certify: 

That I am a disinterested person herein; 
that the foregoing Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel 
or attorney for any of the parties to said hearing, nor in 
any way interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my 
hand this r~xr/^ day of May, 1992. 



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200-R 

Additional copies of this publication may be purchased for $4.75 per copy plus 
current California sales tax. 

Senate Publications 
1100 J Street, B-15 
Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 

Please include Senate Publication Number 200-R when ordering. 






HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 27, 1992 
1:55 P.M. 



OOCUMENTS DEPT. 



4" 



201 -R 



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SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



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STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, MAY 27, 1992 
1:55 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



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APPEARANCES 

MEMBERS PRESENT 

SENATOR NICHOLAS PETRIS, Acting Chair 

SENATOR ROBERT BEVERLY 

SENATOR HENRY MELLO 

MEMBERS ABSENT 

SENATOR DAVID ROBERTI, Chairman 

SENATOR WILLIAM CRAVEN, Vice Chairman 

STAFF PRESENT 

CLIFF BERG, Executive Officer 

PAT WEBB, Committee Secretary 

RICK ROLLENS, Consultant on Bill Referrals 

NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 

STEFAN L. MANOLAKAS, Member 
California Horse Racing Board 

DENNIS HUTCHESON, Executive Secretary 
California Horse Racing Board 

CHONG W. HA, Director 
Stephen P. Teale Data Center 

SAM A. EGIGIAN, Member 

California Integrated Waste Management Board 

DENISE DELMATIER 

The Gualco Group for Norcal Waste Systems, Inc. 

PAUL M. RELIS, Member 

California Integrated Waste Management Board 

JOHN L. RODRIGUEZ, Chief Deputy Director 
Department of Health Services 

DENNIS FLATT, Legislative Advocate 
Kaiser Permanente 



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APPEARANCES (CONTINUED) 

TERRI GIRSH 

California Children's Hospital Association 

FRED SHANBOUR, Chair 

California Medical Assistance Commission 

JUDITH WOLER 

California Reproductive Health Association 

MILTON G. GORDON, Rules Committee Appointee 
California Medical Assistance Commission 

DEBORAH KELCH 

California Association of HMOs 

THERESA MENEFEE, Former Employee 
Department of Health Services 

ARNOLDO TORRES, Legislative Advocate 
California Hispanic Health Care Association 



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INDEX 



Proceedings 



Governor ' s Appointees : 



Page 

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STEFAN L. MANOLAKAS, Member 

California Horse Racing Board 1 

Background and Experience 1 

Questions by SENATOR PETRIS re: 

Effort to Eliminate Health Plan for 

80 Employees 2 

Resolution of Issue 3 

Unnecessary for Board to Intervene 3 

Machines Vs . Parimutual Clerks 4 

Procedure for Processing Labor Grievances 4 

Request by SENATOR PETRIS for Nominee to Review 
Condition, Situation, and Statute Regarding Employees 5 

Questions by SENATOR MELLO re: 

Number of Employees under CHRB's Jurisdiction 5 

Ethnic Make-up of Employees 6 

Letter from SENATOR TORRES regarding 

Ethnic Diversity in CHRB 7 

Total Number of Staff under CHRB Jurisdiction 

and Ethnic Percentages 7 

Response by DENNIS HUTCHESON, Executive 
Secretary, California Horse Racing Board 7 

Request by SENATOR MELLO to Put Over Confirmation 

for One Week so Committee Can Access Information 8 

Discussion 8 

Committee Action 9 



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CHONG W. HA, Director 

Stephen P. Teale Data Center 10 

Background and Experience 10 

Questions by SENATOR PETRIS re: 

Tenure at Data Center 11 

Billing Method 11 

Business, Transportation and Housing 

Agency not Billed for Full Costs 12 

Keeping Up with Technological Advances 12 

Availability of New Equipment 13 

Reason for Being Behind 13 

Answerability 14 

Motion to Confirm 14 

Committee Action 15 

SAM A. EGIGIAN, Member 

California Integrated Waste Management Board 15 

Background and Experience 15 

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Crisis in Solid Waste Industry: Landfills 15 

Questions by SENATOR PETRIS re: 

Markets for Recycling 17 

Means of Alerting Communities about 

Need to Start Siting Landfills 18 

Means of Taking Materials out of Waste 

Stream for Recycling 19 

Should Curb-side Recycling Be Statewide 

Requirement 19 

Witness in Support: 

DENISE DELMATIER 

Gualco Group 

Norcal Waste Systems, Inc. 20 



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Questions by SENATOR PETRIS re: 

State-mandated Local Recycling 

Motion to Confirm 

Committee Action 

PAUL M. RELIS, Member 

California Integrated Waste Management Board 

Background and Experience 

Community Environmental Council 

California Resource Recovery Association 

Resource Center 

Service on Senate Taske Force 

Trip to Japan to Determine Secondary 
Material Demand 

Questions by SENATOR PETRIS re: 

Japan Trip 

Possibility of Charging Residents by Bulk 

Incineration 

Motion to Confirm 

Committee Action 

JOHN L. RODRIGUEZ, Deputy Director 
Department of Health Services 

Recommendation by SENATOR PETRIS to Put Over 
Confirmation for One Week 

Background and Experience 

Management Philosophy 

Questions by SENATOR MELLO re: 

Reform of Medi-Cal Billing 

Number of Opposition Letters from California 
Alliance for the Mentally 111 



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Request to Go through Letters in Opposition 
and Respond to Them Next Week 

Need to Give High Priority to Uniform Billing 

Promulgation of Regulations to Allow 
Investigational Drugs and Therapies 

Obligation to Follow Law 

Department's Opposition to AB 1625 
in 1989 

Determination of Medical Necessity 

Prior Authorization Leaves Patients 
in Limbo 

Obligation to Give Medical Care, Budget or 
No Budget 

Case of Elderly Woman Needing Dentures 
Questions by SENATOR BEVERLY re: 

Reference to SB 127 (Russell) 

Witnesses in Support; 

DENNIS FLATT 
Kaiser Permanente 

TERRI GIRSH 

California Association of Children's Hospitals 

FRED SHANBOUR, Chair 

California Medical Assistance Commission 

JUDITH WOLEN 

California Reproductive Health Association 

MILTON G. GORDON, Rules Committee Appointee 
California Medical Assistance Commission 

DEBORAH KELCH 

California Association of HMOs 

Witness in Opposition; 

THERESA MENEFEE, Former Employee 
Department of Health Services 



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Discrimination Issue 50 

Training for Management Staff as 

Part of Settlement Agreement 50 

Experience while in Medi-Cal Eligibility 

Branch 51 

Discriminatory Action at FIMD regarding 

Watermelon and Note 51 

Branch Chiefs Using State Time and Funds 

to Conduct Personal Business 51 

Husbands and Wives Employed in Same 

Divisions 51 

Questions by SENATOR MELLO re: 

Unsigned Letter 52 

Department ' s Time Frame in Referencing 
Discrimination Complaints 53 

SPB's Data on Percentage of Ethnic Groups 

Involved in Adverse Actions in Department 53 

Questions by SENATOR PETRIS re: 

Time Lag between Signing of Settlement 
Agreement and Startup of Training 54 

Conclusion by MR. RODRIGUEZ 54 

Intolerance for Discriminatory Acts 54 

Need for Pro-active Measures 54 

Reason for Delay in Training 55 

Questions by SENATOR PETRIS re: 

Who Does Management Training in Discrimination 56 

Signs of Improvement 56 

Witness with Concerns: 

ARNOLDO TORRES, Legislative Advocate 

California Hispanic Health Care Association 58 

Accessibility of Nominee 58 



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Department Inherited a Bad System 59 

Lack of Parity Historical Problem 

with Department 59 

Need to Create Comfortable Environment for 

Employees in Department 60 

Governor's Lack of Concern 61 

Need to Prioritize Affirmative Action 61 

Request that Department of Health Services 

Submit Plan of Action for Dealing with 

Inherited Problem of Discrimination 62 

State Cannot Afford Expensive Discrimination 
Lawsuits 63 

Belief in Nominee's Ability 63 

Question by SENATOR MELLO re: 

Timing of DR. COYE ' s Confirmation 

on Senate Floor 64 

Request for Bipartisan Letter from Rules 

Committee to DR. COYE 64 

Willingness to Comment and Make 

Suggestions on Letter 65 

DR. COYE's Nomination Not Being Held Up 

for Personal Reasons 65 

Question by SENATOR BEVERLY re: 

Position on RODRIGUEZ Confirmation 65 

Statements by SENATOR PETRIS re: 

Newspaper Comment on COYE's Nomination 66 

Committee Action to Hold Nominatino 66 

Termination of Proceedings 67 

Certificate of Reporter 68 



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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 
SENATOR PETRIS: Now we have appointees of the 
Governor. We have one that was put over from prior meetings, so 
let's start with number two, Mr. Manolakas, Horse Racing Board. 
MR. MANOLAKAS: Good afternoon. 

SENATOR PETRIS: Good afternoon, Mr. Manolakas. Our 
custom is to ask the nominee why he or she feels that he or she 
is qualified to serve in this capacity. Do you want to tell us? 
MR. MANOLAKAS: Well, I think a couple of the factors 
that may have tilted in my favor, first, there is — there are 
presently no attorneys besides myself presently sitting on the 



CHRB, and a significant portion of our time is spent 

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interpreting, or in some manner enforcing statues. And I think 
that that probably — 

SENATOR BEVERLY: Would you move that mike closer. 

MR. MANOLAKAS: Is that better? 

SENATOR PETRIS: Yes. 

MR. MANOLAKAS: I was saying that having a legal 
background, perhaps, helps me in interpreting and enforcing some 
of the statutes that we have to do on a monthly basis and often 
times more often. 

In addition, there was no representation, other than 
one other Commissioner, from the Northern California region, and 
I believe that also helps balance between the northern and the 
| — the northern part of the state and the southern part of the 
state. 



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SENATOR PETRIS: Are you the only one at the present 
time? 

MR. MANOLAKAS: No, there's one other one. 

SENATOR PETRIS: All right. Any questions from any 
of the Members? 

Is there any opposition? Anyone here to testify in 
support? 

I have a question. I've had a problem for years with 
the Board, and I ask all the nominees, but none of them has 

changed the policies, so I'm going to ask you. 

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MR. MANOLAKAS: All right. 

SENATOR PETRIS: I think the history of individual 
jtracks and the Board itself with respect to labor relations 
jjleaves a lot to be desired. There's a beef going on now at 
Golden Gate — it may have been resolved — where they're moving 
to eliminate the health plan for 80 percent of the employees, at 
a time when we're scrambling to see what we can do about health 
plans for, you know, everybody in the state. 

It took them years to get that health plan in their 
package. They gave up pay raises and so forth to get the health 
plan. Now we're faced — or at least the parimutual clerks are 
facing elimination of the health plan for 80 percent of them. 

I think that's an outrageous demand. This is a 
controlled industry. They're guaranteed a certain amount of 
money, and they pay a certain amount to the state. I don't know 
how strong that guarantee is, but they're in a preferred 
position. 



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I think it's unconscionable that we permit that kind 
of conduct on the part of a track. 

Has this come to your attention at all yet as a 
Member of the Board? 

MR. MANOLAKAS: Senator Petris, about two weeks ago, 
there was a labor dispute. They called in an emergency meeting 
down in Southern California. That has since been resolved. I 
know that there were a number of outstanding issues. I'm sure 
one of them was probably the health care benefits. 

The Board was being called upon not to decide whether 
that particular issue was fair or unfair, but rather to 
interpret a statute that you may be familiar with, and it talked 
about the ability of the unions to insist upon a contract prior 
to any satellite wagering facilities to be open. 

Prior to that emergency meeting, the issue was 
resolved and the labor dispute was put behind everybody, so we 
were never called upon to — 

SENATOR PETRIS: Was that a statewide thing? 

MR. MANOLAKAS: I believe so, yes. 

SENATOR PETRIS: How was that resolved? 

MR. MANOLAKAS: It was resolved in this particular 
instance with the track owner and the union getting together and 
resolving the dispute without having the Board intervene. 

SENATOR PETRIS: You don't know which way it went? 

MR. MANOLAKAS: No, I don't. I'm assuming it was 
satisfactory to both parties. Or, both parties were a little 
bit upset, which is usually the way things are resolved. 



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SENATOR PETRIS: Is that binding on all the tracks? 
Is this a statewide effort? 

MR. MANOLAKAS: There is another issue that I think 
is presently occurring that I'm aware of with regard to, I 
believe it's 280, that has to deal with machines versus having 
parimutual clerks take $2 bets. And that has been — is that 
the issue that you're talking about? 

SENATOR PETRIS: That comes up every once in a while 
periodically over the years. 

MR. MANOLAKAS: That's come up before the Board. 

SENATOR PETRIS: Which track is that? Is that all of 
them? 

MR. MANOLAKAS: Well, this — it was in Northern — 
it was focused on Northern California at the time it came before 
us. And I believe at the time it came before the Board, it was 
our decision to allow the management and the unions to work that 
out between themselves, as opposed to intervening. 

Other than that, there have been to my knowledge no 
other labor issues that have been before us so long as I've been 
on the Board. 

SENATOR PETRIS: What is the procedure for processing 
a labor claim, let's say, of an individual employee, not just a 
union thing as a whole? The Board doesn't have anything 
equivalent to the ALRB or the NLRB, or any of those. Where does 
a individual go, other than to the shop steward representing the 
union? 

MR. MANOLAKAS: I'm afraid I'm a bit at a 



5 

disadvantage, since none have come before us, no labor disputes, 
other than the ones I've mentioned that have come before me. 

I'm not certain of the procedure. I would imagine it 
would be taken up with the Executive Secretary, Mr. Hutcheson, 
and it would be handled through the CHRB administrative staff. 

SENATOR PETRIS: Well, I, for one, would like you to 
review the condition and the situation, including the statute, 
with respect to the employees . 

My impression over a period of years, because there 
is a track in my district, is very bad. I would appreciate it 
if you could, as a lawyer, check it out and get back to me, 
particularly if you have any suggestions on improving the 
situation. 

I guess I can't ask you to do more than that. 

MR. MANOLAKAS: I certainly will. 

SENATOR PETRIS: Except to demand fairness in all 
disputes for both sides. 

MR. MANOLAKAS: I try and do that. 

SENATOR PETRIS: Does anyone else have a question? 
Senator Mello. 

SENATOR MELLO: In that regard, about how many 
employees are under the jurisdiction of the Horse Racing Board 
that you hire? 

MR. MANOLAKAS: The CHRB doesn't — the Board in 
itself doesn't hire anybody directly. It's designated to the 
Executive Secretary. 

We at times have contracts brought before us for 



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might be? 



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outside consultants. For instance — 

SENATOR MELLO: Do you have stewards? 

MR. MANOLAKAS: We have stewards. There's a Steward 
Committee that makes a recommendation to the Board, and again — 

SENATOR MELLO: There's other staff that help and 
assist the Horse Racing Board; is that correct? 

MR. MANOLAKAS: That's correct, under the Executive 
Secretary. 

SENATOR MELLO: Do you know what the total number 



MR. MANOLAKAS: I'm sorry? 

SENATOR MELLO: Do you know what the total number 



might be? 



MR. MANOLAKAS: Of stewards or overall employees? 

SENATOR MELLO: Overall staff that are either 
directly or indirectly come under the jurisdiction of the Horse 
Racing Board? 

MR. MANOLAKAS: I do not, but Mr. Hutcheson is here 
today, if you would like to know the answer to that question. 
I'm sure he has the answer. 

SENATOR MELLO: What I'm more concerned about is, as 
I recall, a former person, a member, up here that was up for 
confirmation, the affirmative action or the ethnic make-up of 
the employees has been about zero as far as I recall. I just 
wanted to know whether that ' s improved any . 

The Board does not reach out into hiring people from 
ethnic populations . 



7 

MR. MANOLAKAS: You know, I was aware of a letter 
from Senator Torres that came across my desk, I think, two 
months ago. And the questions were posed regarding the ethnic 
diversity of both the CHRB staff, and the people under them, as 
well as the stewards. 

And my recollection in that letter is that we are 
meeting or exceeding the requirements currently imposed by — 

SENATOR MELLO: Is the person that you have here 
maybe aware of those numbers? 

MR. MANOLAKAS: Certainly. 

SENATOR MELLO: We have, the Rules Committee and the 
state, does have a policy on affirmative action and employing 
people from different ethnic backgrounds to help balance out 
those populations that are the make-up of California. 

My real question is, what is the total extent of the 
staff that are under the jurisdiction, either directly or 
indirectly, and what percentage of them are from Hispanics, 
Black, Native Americans, and other populations? 

MR. HUTCHESON: Senator Mello, Members of the 
Committee, Dennis Hutcheson. I'm the Executive Secretary of the 
Board . 

We have 60 civil service employees, and roughly 15-20 
working stewards and official veterinarians. 

The Assistant Executive Secretary is Japanese. The 
Assistant Secretary for Security and Enforcement is Hispanic . 
The Chief Investigator is Hispanic. 

Of 60 civil service employees, I would say that 



8 

probably 30-40 percent are Black or Hispanic. We have two 
Filipino employees. 

So, roughly 30-40 percent of our staff, civil service 
staff, I think, are Hispanic, Black, or other minority groups. 

The stewards are not civil service employees. 
They're personal sort of contractors. And I admit that we have 
a problem as far as outreaching to minority groups in the 
stewards area. We have, of the stewards that are working, two 
females are — work at a thoroughbred tracks; one's working at a 
fair track; and two others are working at fair and major meets. 

SENATOR MELLO: Would it be possible — I think 
Senator Petris asked some questions also. Your appointment date 
goes into August. 

I'm not trying to hold it up or anything. I think, 
from my point, I think the Rules Committee should have this 
information, both Senator Petris ' s questions and mine, regarding 
your employees and the number in each category, both exempt and 
civil service, so we can have it as a matter of record for the 
Rules Committee. 

MR. HUTCHESON: I provided that to Senator Torres 
upon his request. I'll make a copy of my response available to 
the Committee Members . 

SENATOR MELLO: Mr. Chairman, would that be 
agreeable, then, to put it over for one week or two weeks? 

SENATOR PETRIS: Yes, that's agreeable to me. 

There are people here who want to testify. May I ask 
how many are here to testify? Excuse me, there weren't any 



before. 

You're asking for another week. 

What is your time, August? 

MS. MICHEL: August 14th. 

SENATOR PETRIS: We have plenty of time. 

MR. MANOLAKAS: So, you'd like me to come back then? 

SENATOR PETRIS: Yes. That's a normal request of any 
ilMember that wants more information and asks that it go over a 
week. We always do it. 

SENATOR BEVERLY: That's what I was going to comment 
on. 

SENATOR PETRIS: Yes, Senator Beverly. 

SENATOR BEVERLY: At the request of any Member of the 
Rules Committee, we would hold the matter a week. 

You shouldn ' t infer from that that there ' s anything 
negative, necessarily. 

MR. MANOLAKAS: No, I'm not. It's just a matter of 
time. 

Thank you. 

SENATOR PETRIS: He's a busy lawyer and developer, 
and so forth, and it's costing him a lot of money to come in 
here, but we'll ask you to give up that money one more time and 
come back next week. 

MR. MANOLAKAS: I'd be happy to. 

SENATOR PETRIS: Fine, thank you. 

All right, out next person is Mr. Chong W. Ha, 
Director of the Stephen P. Teale Data Center. 



10 

Mr. Ha, we'll ask you the same question. Convince us 
why we should support your nomination. 

MR. HA: Yes, Chairman Petris and Members of the 
Rules Committee. 

It ' s quite an honor for me today to appear before you 
for my confirmation as Director of the Stephen P. Teale Data 
Center. 

In the last 28 years I spent in the private sector in 
the information technology business. The companies include: 
United California Bank, Transamerica Corporation, Atlantic 
Richfield Company, First Interstate Bank, Ticor Title Insurance 
Company, and MCA Universal Studios. 

The last 14 years of those 28 years I held a senior 
management position. At First Interstate Bank, I managed both 
Los Angeles and San Francisco data center for the bank. I was 
there for seven years. At Ticor Title Insurance Company, I 
was Vice President in charge of MIS. I was responsible for 
application development, data center management, and the 
telecommunications department. I was there for over six years. 

At MCA Universal Studios, I was responsible for 
managing MCA data center. I was there for three months before 
my appointment to the current position. 

I went to UCLA for my undergraduate degree in 
Economics. And while I was with Interstate Bank, I attended 
Executive Management Program at Management Center at Claremont 
Graduate School and received my Management Degree — Master's 
Degree in Management. 



11 

I was active in the Asian community in Los Angeles. 
I was on the Board of Asian Pacific American Legal Center, 
Korean Youth Center, and also Asian Pacific Alumni of UCLA. 

I'm married and have two — two daughters. One is a 
graduate of UCLA and working for a bank in Los Angeles, and my 
younger daughter is a junior at UCLA. 

Thank you, gentlemen. 

SENATOR PETRIS: Any questions? 

Anyone in the audience desire to testify either in 
favor or in opposition to this nomination? 

Okay, I have a question. How long have you been 
there at the Data Center? 

MR. HA: Last eight months. 

SENATOR PETRIS: Eight months? 

MR. HA: Yes. 

SENATOR PETRIS: That's operated like a business. 
You have state agencies that have need for your services, and 
you provide that service — 

MR. HA: Yes. 

SENATOR PETRIS: — and you bill them? 

MR. HA: That's correct. 

SENATOR PETRIS: How is that billing determined? How 
sets the rate? 

MR. HA: We set the rate based on the expenditure for 
the particular fiscal year, and we try to recover just the cost. 

SENATOR PETRIS: Are the clients pretty good in 
paying their bills? 



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MR. HA: Yes, they are. 

SENATOR PETRIS: I've been told that one of the 
agencies wasn't billed for some pretty extensive work. Are you 
familiar with that? 

MR. HA: It wasn't, sir? 

SENATOR PETRIS: I understand that in one service 
involving computer equipment and support to the Business, 
Transportation and Housing Agency, they weren't billed for the 
full costs. So, that means that to the extent that you don't 
get the money from that particular client, it kind of shifts the 
burden to the other clients. 

Do you recall any instance since you've been there 
where the billing wasn't 100 percent? 

MR. HA: As far as I know, we are billing to the 
agency, and I have no knowledge of what happened in the past. 

SENATOR PETRIS: So, are you saying that you always 
bill each client for the full amount? 

MR. HA: Yes, that is correct. 

SENATOR PETRIS: And it's always been done during the 
time you've been there? 

MR. HA: Yes. That's the practice. 

SENATOR PETRIS: How do you keep up with the 
advancing technology in data processing? 

MR. HA: Well, I think I'm very fortunate that I went 
through every facility of data processing in the last 28 years. 
And as you may recall, I started as an operator in 1964, when I 
was going to school. So, I spent 28 years, as I told you. 



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SENATOR PETRIS: So you know the field? 

MR. HA: I read all the technical journals and try to 
keep up with the technology. 

SENATOR PETRIS: The little reading I've done 
indicates that the new machines become obsolete very fast — 

MR. HA: Yes. 

SENATOR PETRIS: — and you have to really stay on 
top of it. 

MR. HA: Yes, it is. 

SENATOR PETRIS: Do you always get the new stuff, and 
do you have a budget that permits you to do that? 

MR. HA: We are not quite getting the new stuff. I 
think we are a little behind in that, but we're trying to keep 
up with the technology. 

SENATOR PETRIS: You are not behind because of the 
money problem? 

MR. HA: I don't think that was the problem in the 
past. 

SENATOR PETRIS: What's causing you to be behind now? 
Just the work load? 

MR. HA: Well, it's a matter of objectives that the 
previous staff has set. And as you know, the technology's 
changing, and the computer is getting smaller and smaller. And 
one of the — one of the dilemma that everybody has in — and 
also in the private sector is that the application is reaching 
an old, old program. So, you take a tremendous investment in 
combining those programs. So, you really have to set the right 






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direction to achieve that goal . 

SENATOR PETRIS: Does the Data Center also have a 
board? Is there a committee or a board of directors that you 
answer to? 

MR. HA: No, we don't have. 

SENATOR PETRIS: Who's your boss? 

MR. HA: My boss is the Secretary of Business, 
Transportation and Housing. 

SENATOR PETRIS: You report directly to the 
Secretary. 

MR. HA: Yes. 

SENATOR PETRIS: Any other questions? 

No testimony from the audience, do I hear a motion? 

SENATOR BEVERLY: Move the approval of the 
nomination. 

SENATOR PETRIS: Senator Beverly moves approval. 
Call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris. 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 



15 

Three to zero. 

SENATOR PETRIS: Okay, congratulations. Your 
confirmation will be reported, recommend confirmation, to the 
Floor. You still have another vote to go. 

MR. HA: Thank you very much. 

SENATOR PETRIS: Next we have Mr. Egigian, Integrated 
Waste Management Board. 

MR. EGIGIAN: How do you do, sir. 

SENATOR PETRIS: Is this your second time around? 

MR. EGIGIAN: Yes, sir. I've been on the Board for 
about 18 months, and this is my second appointment. 

SENATOR PETRIS: So, you did a partial on the first 
go-around, partial term. 

MR. EGIGIAN: Yes, sir. 

SENATOR PETRIS: Do you want to refresh our memory 
why we should support you? 

MR. EGIGIAN: Certainly. 

I'm a person that has 40 years' experience in the 
waste industry. AB 939 has a slot in there for somebody from 
the waste industry. 

I have the support of the industry in all parts of 
the state. I was asked to go into this position, and at their 
pleasure, I did so. 

I have been involved in many areas of this particular 
business. And at the particular time, inasmuch as our plans 
are coming in, we find that there's a great crisis in the solid 
waste industry as far as landfills go. And I've been spending a 



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lot of my time recently in that area, and we find out that 40 
percent of the population live in — in California, live in an 
area that has less than five years of capacity left in their 
landfills. And our experience shows us that landfills take from 
11-14 years to site and to permit. So therefore, I feel that 
it's important that the elected officials and the people in 
these various communities, whether they're private citizens, or 
whether they're people that are trying to start these landfills, 
have a better idea on what to do and how to do it. 

We've — we're in the process of planning an 
information type of a program that will enlighten elected 
officials in these communities as to what landfills are; that 
they're not the old dumps of 40 years ago. These are engineered 
fills, and they've got liners, and they're protected, and the 
gas is taken out, and the leachate is taken out. 

So, before the crisis becomes a real big problem, we 
are — and I've got the support of a lot of the Board members to 
go on this particular process and make sure that everybody is 
well aware of what's happening. 

I've also engaged in a direct dealing with the 
industry itself, and in the last several years, they've spent 
hundreds of millions of dollars setting up these MRFs and these 
facilities to recycle the goods that are coming out in the waste 
stream that we've been instructed to do in 939. 

We're involved with marketing and many other projects 
that will make this bill actually happen. I am convinced that 
by 1995, we can pull out 25 percent of the material out of the 



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stream, and by the year 2000, it will be no problem to pull to 
50 percent. 

The biggest problem today is the markets, and we're 
working on the markets . And we hope to have some success 
shortly. We're hearing about some large mills that want to come 
into the area, paper mills to process the paper, the newspaper. 

And so, we're working in every area that we can to 
make sure that private, who's handled this all the time, spend 
their money and do these things to make sure this law becomes 
reality. 

SENATOR PETRIS: What are some of the other markets, 
other than paper mills? 

MR. EGIGIAN: Well, the glass market has been very 
poor. The waste paper has been very poor. Aluminum cans 
there's no problem with. Plastics, we're getting more people 
involved in that area. 

So again, it depends on how the free market moves as 
far as these materials go. I, myself, being from private 
enterprise, don't want to spend all this money collecting this 
material and putting it in warehouses, and then six months 
later, running it into a landfill and paying another $50 a ton 
to dispose of it. 

So, we're trying to get a full circle going. 
Recycling only becomes recycling when you pull this material out 
of the waste stream, and it's processed, and it's reused again 
to manufacture something else. 

SENATOR PETRIS: Do you have a five-year projection? 



18 

With fourteen years to pick a site, we've got a nine-year 
problem there somewhere. 

MR. EGIGIAN: At least. 

SENATOR PETRIS: How does the Board go about alerting 
the various communities? Do you send out a letter to each of 
the communities? How do you handle that? 

MR. EGIGIAN: The law — we remind them of what the 
law says, and 939 says that every community should have a 
15-year capacity for landfill so they will not be short. 

SENATOR PETRIS: The average right now is five; is 
that it? 

MR. EGIGIAN: In 40 percent of the state it's five. 
And this is in the Southern California area, where the heavy 
population is, and some of it is up in this area also. 

So, what we're hoping to do is, as soon as we can get 
— well, let me back up just a minute. 

I've been moving around the state within the 
industry, industry governmental groups, and I've been giving 
talks and showing a film that we have. You might have seen it; 
it was "20/20" had this film on, about a landfill in Michigan, 
where the city has actually profited greatly by this landfill. 
And the money and the revenue that has come in from it, from 
building a new city hall, to fire trucks, to the football teams, 
jto the best response if you're going to have a heart attack it 
should be in that city because they've got the best materials in 
their ambulances — 

SENATOR PETRIS: Recycled materials? 



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MR. EGIGIAN: No, these are brand new, but they are 
j recycling. The material that goes into their landfill that 
they're making this money off of is coming in from outside of 
their own particular area. There's a lot of communities that 
are bedroom communities that don't have the room, the canyons, 
and whatever it takes, to have a landfill. 

SENATOR PETRIS: How do you take stuff out of the 
stream? You're predicting up to 50 percent by the year 2000. 

MR. EGIGIAN: Yes. There are several ways to do it. 
One is curb-side recycling. And this is where you are given by 
the community or the hauler plastic baskets, or bags, and you 
separate the plastic, and the bottles, and the aluminum cans in 
one of them, then you put the newspapers in another one. This 
is partial recycling here. 

SENATOR PETRIS: That's local initiative. 

MR. EGIGIAN: That's the local initiative. 

SENATOR PETRIS: Should that be a statewide 
requirement? 

MR. EGIGIAN: Well, I don't know. Some people think 
so. I'm not convinced as that's the best way to go. 

SENATOR PETRIS: Why not? 

MR. EGIGIAN: I like the idea of the MRFs . This is 
where you pick up the material as it has always been picked up. 
You put the trash out on Friday, if that's your day to pick it 
up, and you forget about it and it's gone. 

Now, the MRF, all this material is dumped into this 
MRF. It goes through a trammel, and there's many separation 



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lines that have either air separation, or flotation, or magnetic 
separation, and there are people on both sides of this belt, and 
they're — whatever there is a market for, and whatever they 
want out of the stream, they're picking it out of the stream. 
The rest of it goes into a hopper, and it goes into the 
landfills. 

So, as we develop new markets for these materials, 
more and more of this trash can come out of the waste stream. 

SENATOR PETRIS: Thank you. 

Any questions by any Members? 

Anyone here in the audience care to testify for or 
against? 

MS. DELMATIER: Mr. Chairman and Members of the 
Committee, Denise Delmatier with the Gualco Group on behalf of 
Norcal Waste Systems . 

We're here to support Mr. Egigian's reappointment to 
the Board. We believe that he has demonstrated a commitment to 
successfully implementing AB 939. He has been open to, of 
course, our industry as the waste industry representative, and 
I've seen and witnessed his openness and open door policy to 
local government, as well as environmental community. We 
believe that he has demonstrated a competence and eagerness to 
successfully implement this Integrated Waste Management Act. 

SENATOR PETRIS: Would you give us your name again 
and the organization you represent? 

MS. DELMATIER: Denise Delmatier on behalf of Norcal 
Waste Systems . 



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SENATOR PETRIS: Do you think there ought to be a 
state law requiring local recycling? 

MS. DELMATIER: Well, the law requires — mandates 
that local communities divert 25 percent and 50 percent by the 
year 2000. How they get to that 25 percent and 50 percent is 
left up to the local jurisdiction to individually select 
programs that tailors — that is tailored to their community, 
best meets the needs of that individual community. 

Some programs work well in some communities and not 
well in other communities, depending upon the local needs and 
what ' s already there . 

SENATOR PETRIS: So how is it working out overall? 

MS. DELMATIER: I — so far, and I think the Board 
can attest to this, but the draft SRREs, the Source Reduction 
Recycling Elements, that are coming into the Board are very good 
at demonstrating the ability of local communities to in fact 
meet, if not pass, the goals of 25 percent and 50 percent. 

I know, I happen to sit on a local solid waste 
advisory committee for 939, and they're estimating 70 percent 
diversion by the year 2000, so we're well on our way. 

SENATOR PETRIS: We're on track? 

MS. DELMATIER: Yeah. 

SENATOR PETRIS: Any questions of the witness? 

Thank you. 

Senator Beverly moves confirmation? 

SENATOR BEVERLY: So move. 

SENATOR PETRIS: Call the roll. 



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SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

SENATOR PETRIS: We recommend your confirmation to 
the Floor. 

MR. EGIGIAN: Thank you, gentlemen. 

SENATOR PETRIS: Congratulations. 

MR. EGIGIAN: Thank you. 

SENATOR PETRIS: Now we have Mr. Relis also of the 
Waste Management Board. 

You've heard the questions put to the others. Is 
this your first go-around? 

MR. RELIS: Yes. 

SENATOR PETRIS: Do you want to tell us why we should 
support your nomination? 

MR. RELIS: Mr. Chair, Members of the Committee, by 
way of background, as the environmental member on the Board, I'd 
like to give you a brief history of my work in that regard. 

I founded in 1970 the Community Environmental Council 



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of Santa Barbara, a nonprofit environmental educational 
organization which I worked with for 20 years prior to coming to 
the Waste Board. It was active in air, water quality, energy, 
and land use related issues. Started the first recycling 
program in Santa Barbara County. 

The Council was also the founding headquarters of the 
California Resource Recovery Association, a consortium of 
nonprofit and recycling businesses in the state. It sponsored 
some of the first recycling conferences in California, 
published the first comprehensive studies of the possibilities 
for recycling. 

In 1982, I took charge of all the environmental 
activities of the organization I just described, including 
recycling operations. 

When I was appointed by the Governor to the Waste 
Board, I left, as I said, a 20-year career with this 
organization, which employed some 50 people, and had an 
operating budget of about 4.5 million. 

In 1983, I developed the Guild A Resource Center, the 
environmental research arm of the Council. The Center, which 
now serves as headquarters for this organization, is a state of 
the art energy efficient building. Its purpose is to bring 
together decision makers in the public and private sectors with 
environmental leaders to develop education programs, policies, 
and business strategies that demonstrate how environmental ad 
economic development objectives can be fused. 

The policy work of the Center's had a bearing on the 



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California Beverage Container Recycling and Litter Reduction 

Act, and the California Integrated Waste Management Act. The 

Center ' s contributions to the development of new and more 

environmentally responsible waste management and recycling 

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systems, I believe, are well known around policy experts in this 

business, nonprofit, and governmental sectors here in California 

and elsewhere in the country. 

In my role as President of CEC, I authored or 
co-authored major policy papers on all aspects of integrated 
waste management, including: ways of reducing waste; the 
relationship between recycling, landfill, and incineration; 
composting; and the development of markets for secondary 
materials. I brought samples of that work, if you care to look 
at it. 

In '88, I served as Senator Roberti ' s appointee to 
the Senate Task Force on Solid Waste Management, chaired by 
Senator Vuich. 

In 1988, this organization — I directed this 
conference which was the largest secondary materials market 
conference at that time in the country. It brought together 
representatives from Pacific Rim countries such as Japan and 



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secondary materials, for the purpose of trying to figure out how 
best we could approach market development for California. 

Following this conference, I was invited by the 
Japanese government and other Asian countries to meet with their 
officials and industries to determine secondary material demand 



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from these countries from the United States, and specifically 
California. And this trip was organized by the U.S. Department 
of Commerce. 

It enabled me to observe first-hand the most advanced 
waste management and recycling approaches in Japan, and options 
of reporting U.S. waste management know-how to Taiwan, Korea, 
Thailand, the Philippines, and mainland China. 

My observations and recommendations from that trip 
are contained in this paper, called The Future of Recycling , 
which I wrote about a year before — prior to coming to the 
Board. 

In addition to my policy work with CEC, I helped 
found the Santa Barbara Household Hazardous Waste Management 
Program, among the most successful in the state, and initiated 
metals recovery programs and other curb-side and home composting 
programs in our area. 

In my role at CEC, I also served as a waste 
management consultant to many state, county, and local 
governments, including the Counties of San Bernardino, Kern, 
Sonoma, Santa Barbara, and the Cities of San Diego, Los Angeles, 
Berkeley, and Oxnard. 

I authored the first plan in California to define how 
a city could reach the 50 percent diversion goal mandated by 
AB 939. 

Based on this history, I think I bring a 
comprehensive waste management policy background and practical, 
down-to-earth working experience in recycling and waste 



26 
reduction that is appropriate, given the hierarchy mandated 
under AB 939, focused on waste reduction and recycling. 

That's basically what I have to say. 

SENATOR PETRIS: That's pretty extensive. 

Did we learn anything from Japan on recycling? 

MR. RELIS: Well, actually, we're doing pretty well. 
I expect by '95, if we meet our targets, we'll be comparable to 
Japan in recovery. 

They are very effective in the return of — they 
handle glass much better than we do, and they also have a very 
effective paper recovery program. 

But I think the comparisons in the touting of Japan 
relative to the U.S. in materials recovery is not all that 
warranted. I think we're doing a pretty good job of it now. 

SENATOR PETRIS: I understand that about 55 percent 
of the waste going to the dumps comes from individuals, 
residential, rather than commercial. 

Have you given any consideration, in addition to the 
other things you're doing to try to reduce the flow, to charging 
the individual resident by bulk, so that the less garbage we put 
out, the less we pay, as an inducement to recycling? 

MR. RELIS: Yes, in the — 

SENATOR PETRIS: Is that feasible? 

MR. RELIS: Yes. 

In the source reduction and recycling elements of the 
939 plans, we've received about — over 400 of the 580 that will 
ultimately be submitted and processed by our office. They call 



27 
that in the waste field variable can rates, which means, you pay 
according to what you produce. 

Seattle, the City of Seattle pioneered this, and we 
have required in the preparation of the plans, cities are to — 
cities and counties are to specify what measures they can 
encourage the public to reduce the amount of waste in the first 
place. So, the variable can rate is looked at as one of the 
primary means of doing that. 

SENATOR PETRIS: How's that measured? By weight? 

MR. RELIS: Well, in some cases, in Seattle, they 
have gone to a weight base, but mostly it's by the number of 

containers and the size of containers. So, a very active 

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that's what they get once a week. Whereas, then the size of 
container goes up, so the rate for the 32 would be the least, 
and progressive, the more you generate, the larger the can, it 
would be a larger rate compounded. 

SENATOR PETRIS: Have we given up on burning? 

MR. RELIS: On incineration? 

SENATOR PETRIS: Using the energy? 

MR. RELIS: Well, in the way AB 939 is structured, 
the requirement is that before incinerate — it's referred to as 
'transformation in the law. And it is allowed to count for up to 
:10 percent of the 50 percent number, the diversion rate. But it 
can only count after a city or a county has achieved the first 
25 percent diversion. 

Now, many communities are currently processing wood 



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waste, or yard waste, into — they chip it, and they ship it to 
boilers in the Central Valley. And there are quite a number of 
those. And also waste tires are being incinerated, used as fuel 
for Calvera Cement Company, and the Oxnard facility in Modesto, 
would be two examples . 

So, while it is not a priority, given priority in the 
939 scheme, we still have incineration in the state. 

SENATOR PETRIS: How much of that is used to convert 
to energy? 

MR. RELIS: Most. At this point, almost all — do 
you mean, is the material that's incinerated converted to 
energy? 

SENATOR PETRIS: No, the process of incineration. 

MR. RELIS: Oh, I believe virtually all of the 
incinerators in the state are primary energy generators. 

SENATOR PETRIS: I thought so. 

Any questions by any of the Members? Senator Beverly 
moves confirmation. 

SENATOR BEVERLY: So move. 

SENATOR PETRIS: Call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris. 



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SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

SENATOR PETRIS: You're on your way. Thank you. 

Now we'll take a recess before Mr. Rodriguez, 
Department of Health Services. 

[Thereupon a brief recess was taken.] 

SENATOR PETRIS: Our quorum is back. 

Now we have Mr. Rodriguez. 

Before we start, I'd like to propose — let me find 
out first how many are going to testify on this nomination. 
Seven . 

What I'd like to recommend is that we hear from 
Mr. Rodriguez, hear the testimony — I assume it's pro and con 
out there — and go over to next week for any additional 
testimony that there might be and vote. 

This deadline date is also August, August 12th. 

MS. MICHEL: Yes, sir. 

SENATOR PETRIS: Based on what I've learned so far, 
my own vote would be negative. And if we went to a vote today, 
you'd be rejected. 

I always believe in giving each nominee a full house, 
full committee, out of fairness. 

So, if there's no objection, that's what we'll do. 
We'll hear from you first, and tell us why you think we should 
support the nomination. Then we'll hear from the individuals. 



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MR. RODRIGUEZ: Thank you, Senator. 

Good afternoon, Senators. 

My name is John Rodriguez. I'm the Chief Deputy 
Director for Programs at the Department of Health Services . 

A little bit of background about me. I'm a native 
Calif ornian, raised in Riverside. Went to the University of 
California at Riverside, and have lived in Sacramento since 
1973. 

I've been with the Department of Health since 1973, 
primarily with the Medi-Cal program in a variety of staff 
services, supervisory, and management positions. 

In 1984, I was appointed to a position called 
Assistant Secretary for Program Affairs with the Health and 
Welfare Agency. I was there for approximately one year, where I 
gained considerable experience working as liaison between the 
Agency Secretary and the twelve departments of the Health and 
Welfare Agency. 

In 1985, I was appointed as Deputy Director of the 
Department of Health Services for Medical Care Services, which 
is our Medi-Cal program. As you can imagine, that had been a 
very challenging assignment, where, on a day-to-day basis, 
you're balancing the competing forces of cost, access and 
quality. That's what I did for approximately six-and-a-half 
years, until I was appointed to this position. 

That's a fairly brief sketch of my professional 
background. I'll be happy to go into it in more detail if you 
have any questions . 



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I think what ' s more important for this Committee is 
my management philosophy. What am I going to bring to this job? 
The philosophy I've developed primarily is the time I spent in 
the Medi-Cal program of six-and-a-half years. This is what I 
bring to this current job. 

This philosophy is one which emphasizes first and 
foremost open and clear communication with staff inside the 
Department, and with interest groups and constituencies outside 
the Department. This is a philosophy which clearly articulates 
our priorities both internally and externally. This is a 
philosophy which is open to new ideas and other points of view. 
And finally, it recognizes that we bear responsibility — I bear 
responsibility to improve the programs that I operate. The 
status quo is not acceptable. 

In the weeks and months ahead, we'll be facing, 
perhaps, some of the greatest challenges we have as Legislators, 
managers, people who work for the State of California, as we try 
to fashion a solution for the state budget. It's going to be 
more important an ever for us to clearly set priorities for the 
services that we're going to provide, creatively implement 
program changes that may be necessary, and ensure there are open 
lines of communication to and from all concerned parties. 

This is the type of leadership that I have 
demonstrated in the Medi-Cal program over the past six-and-a- 
half years, and which you can continue to expect from me in the 
moths and years ahead. 

I ' d be happy to answer any additional questions you 



32 
may have. 

Thank you. 

SENATOR PETRIS: All right. 

Any questions at this time? Senator Mello. 

SENATOR MELLO: I want to go through some of the 
letters that I received from people, and some of the concerns. 

One of my biggest concerns that I discussed with you 
the other day is the whole reform of Medi-Cal billing. I know I 
showed you a billing done by the same medical group with similar 
procedures for Ob-Gyn delivery, and one is the short form that 
goes to the third party payers, the insurance company, and the 
other one goes to Medi-Cal. Eighty listings on one, plus the 
standard one's about eight. 

I just can't understand it. I get more complaints on 
it from providers, and even from the patients, about how 
Medi-Cal is so difficult to have access to, and the billing 
takes so long, and records get lost. Then, when they finally 
get paid, it ' s a very small percentage in relationship to their 
costs. 

Many providers are just opting out, as you know, and 
others have put a cap on how many patients they'll see. 

I think, if you did nothing else in your job there 
but to just change the Medi-Cal system, bring it right up to 
what the private billing — private paying is with insurance 
companies, that would be a tremendous improvement. 

So, I just want you to comment briefly on what you 
think you can do as a director of this position. 



33 

MR. RODRIGUEZ: Just a couple of items. 

By the way, this material you gave me, by the way, 
using the tax I.D. number, we were able to track down the 
provider. The provider is, their business name is called Ob-Gyn 
Consultants. And I was able to contact their billing manager. 
Her name is Mary Homick, and I chatted with her. 

And she — she basically told me that, while there 
are singular issues occasionally that she now has ways to 
resolve with us, she felt that once they went to computer 
billing, computerized billing, that they'd had a substantial 
improvement in their billing and was relatively happy. 

She didn't know which physician in her group — it's 
a group practice — that had chatted with you, Senator. But she 
said she'd call me back if there was any significant problems 
that — in polling her members — that she encountered. And she 
never did call me back. 

So, at least in that particular case, there's some 
follow-up. 

Your point, though, about differences between Medi- 
cal billing and the difference between Medi-Cal reimbursement 
rates is something I'm extremely familiar with. 

As far as the rates go, I know as well as anybody the 
— the fact that many Medi-Cal rates are much less than what 
providers would get, even in PPO-type arrangements. I think the 
exception to that would be in the maternity care area, where a 
considerable amount of money has been put in over the last few 
years. The rate increase is about 80 percent, and that 



. 34 
represents a priority that we set. 

I don't think that, because of our budget problem, 
we're going to be in a position where we can substantially 
increase Medi-Cal rates in the short-term. 

But we need to be moving forward toward, and what I 
am committed to moving toward, is common billing forms, common 
data elements. The kind of things that, if a provider bills an 
insurance company, Medi-Cal, Blue Cross, you know, whoever it 
may be, HCFA, the Health Care Finance Administration for 
Medi-Cal, but they're essentially using the same form. And the 
form that we're headed toward, by the way, for physicians is the 
HCFA-1500. That's the form that most providers will be using, 
and that's an area that I think we do have a good chance, 
Senator, of making some movement on, even in a time when we — 
when budget resources are scarce, and we can't significantly 
improve provider reimbursement rates . 

SENATOR MELLO: Well, I think that would be an 
increase for the providers if you just simplified their billing, 
because it would go a long ways . 

I began working with Beverly Myers some years ago in 
trying to get the Medi-Cal system changed. We made a little 
headway, but not much since then. 

I ' ve gotten several letters from other people . One 
is from the Alliance for the Mentally 111. One is from a person 
there in Carmel . 

Have you got copies of these letters? 

MR. RODRIGUEZ: Yes, sir. 



35 

SENATOR MELLO: The other one is from the California 
Alliance for the Mentally 111. I guess they're the same group. 
But they have a lot of negative statements here about how you're 
trying to deal with certain drugs to treat the mentally ill; 
that you're hard to pin down; you're evasive, and you shoot down 
legitimate reimbursements to doctors and hospitals. To take 
care of the mentally ill and AIDS patients in the long run, this 
action seems very costly, and so forth. 

Do you have a copy of that letter? 

MR. RODRIGUEZ: Yes, sir. 

SENATOR MELLO: Do you want to just comment on what 
you see? 

MR. RODRIGUEZ: Briefly, and I'll reply to any 
questions you may have, I view this to be a policy disagreement 
between the Department and myself in particular, since I was in 
charge of the Medi-Cal program at the time. 

One of the bills that we were arguing about came up. 
It revolves around coverage — Medi-Cal coverage of in-patient 
services for the mentally ill. And I — I admit that we have a 
disagreement on that, and that the Department took an opposed 
position on that bill. 

I take exception, however, with the comments about me 
wherein I'm found to be slippery, or evasive, or that I go out 
of my way to make things uncomfortable, or make it tough for 
providers to provide services to the Medi-Cal program. 

I think that if — that if you read many, many of the 
other letters of support that came into me, for me, you'll find 



36 
that the prevailing attitude is exactly the opposite. While 
I've been in a position for six-and-a-half years where my 
standard answer when it came to the money has often had to have 
been no, because we don't have the money, the prevailing 
attitude in these letters is that I was an individual that they 
could work with, who would be listening to other points of view, 
that would communicate directly with people, that would be 
accessible. 

And I'm rather surprised that — that the California 
Alliance for the Mentally 111 found me to be — to be that way. 
Indeed, the physician at the University of California at Irvine, 
who we spent a lot of time working with on developing policy 
statements and clarifying policy statements, I think that we 
went the extra mile in terms of meeting with him, addressing his 
concerns, and we've made a lot of progress, I believe, in terms 
of clarifying the policy. 

I'm not here saying that it was — that we have to 
agree on everything. We have lots of disagreements. But I 
think they're off point in terms of their analysis of my 
character, and that the record with other providers, other 
interest groups, beneficiary groups, as well as staff here in 
the Legislature and Members whom I've worked with over the 
years, would tell you just the opposite. 

SENATOR MELLO: There's a letter written out here 
sort of printed language. Did you see that one? 

MR. RODRIGUEZ: No, sir. 

SENATOR MELLO: It's got a lot of — perhaps, if I 



37 

could just — do other Members have this in their files? It's 
addressed to Nancy Michel. 

SENATOR PETRIS: No, I don't have it. 

SENATOR MELLO: Was this distributed? 

MS. MICHEL: I'm not certain. 

SENATOR PETRIS: Yes, we have it. 

SENATOR MELLO: I don't know who that's from. 

What I'd like to do, John, rather than go through it, 
it's fairly lengthy, I'll give it to you. Then, next week when 
you come back, if you want to offer some comments on it. 
They're raising about five concerns as well. 

Then I also, for the record, have letters from the 
County of Santa Cruz, Eleanor Hall, the Director of Health 
Services Administrator; Children's Hospital in Los Angeles; and 
University Children's Medical Group. I think these are all part 
of the letters that you have. California Association of Public 
Hospitals. So, there are quite a few letters in support. 

My priority is the whole area under your 
administration, but I think high priority should be given to a 
completely uniform billing system, even going electronic, where 
they can do it via the modem on a computer, and you just 
transfer the money electronically. And once it's checked out, 
without a lot of back and forth billing, it goes astray some 
way. 

MR. RODRIGUEZ: You know, I agree with you a hundred 
percent . 

Providers who finally jump into the computer billing 



38 

are immediate billing, whether it's tape to tape, or phone to 
phone line, disk to disk, or what have you. And it cuts out a 
lot of hassles on both ends, and it's obviously cheaper to bill. 

One of the points I wanted to make, Senator, if I 
will, on a policy basis about services to the mentally ill, or 
investigational services of any type to any patient. I think 
that, you know, I emphasize creativity. I emphasize changing 
the status quo, because when you have no money, or you're in a 
negative budget situation, or just as time goes on, the status 
quo is a killer. You've got to be prepared to change the way 
you're doing business to keep up with the way medicine's 
practiced, and to change the rules if you're going to have to 
operate the same type of program with less money. 

Back in 1987, we were working with — I was working 
personally with San Francisco General Hospital as they were 
pioneering many treatments for AIDS patients . At that time in 
Medi-Cal, there was no coverage at all for investigational drugs 
or investigational therapies . 

It was under my direction that my staff promulgated 
regulations for the first time to cover investigational drugs 
and investigational new therapies in the Medi-Cal program. 
Before that, investigational drugs and therapies of any sort was 
not a covered benefit under the Medi-Cal program under 
regulation. 

And the point here is that, addressing the concern 
about that time, I'm looking for ways to not pay for legitimate 
services . I think that ' s the example — and I have a copy of 



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those regulations if someone's interested in looking at them — 
where we looked for a way to solve a problem; where the 
standard medical therapies weren't working in the treatment of 
AIDS. 

It doesn't always have to be the treatment of AIDS. 
It could be the treatment of the mentally ill in this case. 

The point is, is when — Medi-Cal will cover/ and 
it's because of regulations that came in under my watch and at 
my direction, we do cover those things when they're appropriate. 

The issue here is, Medi-Cal ' s got a tight budget. I 
don't want to be paying for things in an in-patient setting that 
could be done on an out-patient basis, or it's not justified. 
Everyday we're setting priorities of where we can put our money. 
If there was all the money in the world, I'm sure you all know 
we could do a lot more things . But we got to set priorities , 
and that's really what I've done here in this case. 

SENATOR MELLO: All right, let me follow up on that, 
though. 

What about, it's all right to have your philosophy, 
but we're a nation of laws. When a law is passed and signed 
into law, aren't you obligated to follow it? 

MR. RODRIGUEZ: Absolutely, sir. 

SENATOR MELLO: Here's what one of the persons say: 
"AB 1625, by Burton, Chapter 1197, 
was signed into law in 1989. 
Rodriguez led Medi-Cal ' s opposition 
to the bill, then found ways for 



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Medi-Cal to ignore the law when it 
was passed and signed, and continued 
to deny reimbursements for 
investigational new drugs for AIDS 
patients, much to the consternation 
of people at the San Francisco 
General Hospital, for whom 
Assemblyman Burton carried the 
bill." 
Is that true or not? 

MR. RODRIGUEZ: It's absolutely not true. 
And just for clarification, we're not arguing about 
payment for the investigational new drug per se. It's 
generally the drug company that covers the cost of the 
investigational new drug. 

What we're talking about is the physician services, 
the hospital services, the ancillary services, if you will, for 
when a — for the situation the patient's in. 

What we're talking about is, should in all cases 
when it's appropriate, does Medi-Cal pay for acute in-patient 
care . 

I would maintain, and it's consistent with the law 
and the regulations, that Medi-Cal pays for in-patient care 
when it's medically necessary. If it's not medically 
necessary, we don't pay for it. 

We have no problem, and the regulations fully 
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investigational drugs, in an in-patient setting, if the medical 
necessity of that admission and that treatment is appropriate. 

SENATOR MELLO: Wait, hold it. 

Who determines the medical necessity? You or the 
doctor? 

MR. RODRIGUEZ: The doctor. The doctors who work 
— well, not me, obviously. Doctors that work with me, for me, 
in our Medi-Cal field office, approve treatment authorization 
requests . All elective treatment authorization — all elective 
surgeries, admissions to hospitals, are prior authorized by the 
Medi-Cal program. 

u 

SENATOR MELLO: What about the attending physician? 

MR. RODRIGUEZ: The attending physician is the — 
is the person who completes the treatment authorization 
request, and actually works with my physician in determining 
whether that admission's proper or not. 

In fact, in this case, I would submit that most of 
the progress we've made in terms of resolving the problem 
between, in this case, University of California at Irvine, 
Psychiatric Department, Dr. Potkin, and the Medi-Cal program 
has been because I have forced Dr. Potkin and — and the 
psychiatrist that works for me in the San Bernardino field 
office to sit down and work together to find the protocols that 
are going to be used by Dr. Potkin, and approve those that are 
appropriate or not. In fact, Dr. Warden, who works for me, has 
gotten a letter from Dr. Potkin, thanking him for the progress 
they've made. I think we've made some significant progress on 



42 
this issue. 

SENATOR MELLO: I've had people call my offices, 
and I'm just shocked by all this medical necessity, and this 
prior authorization if medically necessary, and then it sort of 
leaves the patient in limbo, many times going into an acute 
care hospital, having been prior authorized, but the big 
question mark about whether it's medically necessary. I guess 
you have to wait until later to see whether it was or not. 

This creates a lot — there's a lot of unhappy 
people out there, the way we're running our health programs. 

MR. RODRIGUEZ: Well, I could understand why some 
people would be unhappy, but the reality of it is, we have a 
limited amount of money. Wherever possible, we want to do 
services on an out-patient basis, or a physician's office 
visit, or use drug treatments rather than in-patient admissions 
because, if they can be done, it ' s a heck of a lot cheaper. 

Prior authorization or concurrent review is not 
unique to Medi-Cal. Insurance companies and others do that for 
the same reason we do, because you want to make sure that the 
service is medically appropriate, and because you have a budget 
to stay within. 

SENATOR MELLO: Well, you say we don't have all the 
money, but I mean, Medi-Cal ' s a part of Medicaid, a federal 
program . 

MR. RODRIGUEZ: Yes, sir. 

SENATOR MELLO: My understanding is, you're either 
eligible or you're not. Unless we get into rationing, and I 



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don't think we've approved a way of rationing medicine, but 
we've had deficiencies in the Medi-Cal budget because we're 
obligated. 

When you pass the budget, you're just guessing how 
many people are going to walk in for services . But if the 
amount of people coming in is more than that, I think under 
federal and state law, we're obligated to care for them under 
the law. 

MR. RODRIGUEZ: That's correct, sir. 

SENATOR MELLO: So I mean, if we have the attitude, 
if we don't have all the money, I guess you're saying we're 
going to kick somebody off because we're running out of money. 

MR. RODRIGUEZ: No, it's — we make assumptions in 
our estimate about the number of people who would be eligible 
for the program, and to what extent they will use it. Break it 
down very finely about the types of services they use. 

We also in our assumptions assume that we are going 
to be doing prior authorization, that every in-patient 
admission request is not going to be authorized because it's 
not medically necessary. 

But when we ' re talking about serving f our-and-a- 
half million people on average per month, we're just making 
guesstimates. To the extent we miss that, and medically 
necessary services are provided in excess of what we had 
assumed, yes, sir, we will pay for those. And those are the 
years when I have to come back for, among other reasons, and 
get a deficiency appropriation. And we've done that fairly — 



44 
fairly frequently in the past few years in Medi-Cal . 

SENATOR MELLO: Another case I recall is this 94-5 
year old woman that when in to have some denture work done 
under Medi-Cal and was denied . And they told her they ' d pay 
for removal of her teeth, which, she only had a few left anyway 
at that age. And finally, the Dental Society there in the 
county felt that the decision was awful and went against the 
patient, so they, out of their own funds, just donated their 
services to give her a plate, or a bridge, whatever she needed 
there to help keep her teeth somewhat functioning so that she 
could remain in her health that way. 

Those are the kind of decisions, I think, are very 
strict, and they don't look at what's even best for the 
patient and what saves money in the long run. 

Okay, I think I'll quit the questioning for now. 

MR. RODRIGUEZ: Thank you, Senator. 

SENATOR PETRIS: Senator Beverly. 

SENATOR BEVERLY: Let me ask one. 

This letter from the California Alliance for the 
Mentally 111 refers to a Russell bill, SB 127. 

MR. RODRIGUEZ: Yes, sir. 

SENATOR BEVERLY: It isn't clear to me what he's 
getting at. What is that bill? 

MR. RODRIGUEZ: That was the bill that — the 
policy issue that I was referring to. That was a bill that 
sought to expand Medi-Cal coverage for in-patient services to 
the mentally ill, and which led to the policy disagreement that 



45 
we have before us, sir. 

SENATOR BEVERLY: Thank you. 

SENATOR PETRIS: Is there anyone in the audience? 
We had several shows of hands before. Those in support come 
forward first. 

MR. FLATT: Mr. Chairman, Members, my name is 
Dennis Flatt. I represent Kaiser Permanente. 

Prior to this client, I represented the California 
Association of Hospitals and Health Systems. I had a lot of 
contact with the Department of Health Services, and John 
Rodriguez in particular, in those years representing the 
hospital industry, and I have frequent contact with him now. 

I think he's got one of the toughest jobs in state 
government. And if you look at the programs that he currently 
has under his jurisdiction — Medi-Cal, Family Planning, 
Maternal and Child Health, Public Health, Licensing — it's 
very difficult to be in a position for any length of time there 
without stepping on a lot of toes. 

I heard that there might be some opposition to his 
confirmation, and that's why I came forward. I don't make a 
practice of appearing before this Committee on Governor's 
appointments, but I really respect John over the years of being 
able to call a spade a spade, and to look at things 
analytically, and to be very straightforward about dealing with 
problems that are brought to him. 

In fact, I'd be hard pressed to even recollect an 
instance where I prevailed on an issue. I don't think I've 



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gotten Jack Squat out of this guy over the years in terms of 
things that I ' ve been arguing for . 

But he's been in a very difficult job, trying to 
administer programs with no new money. And frequently, when 
you're representing the hospital industry or health programs, 
you ' re in there arguing for something that requires additional 
funding in some magnitude, and often times big bucks. 

I think he's generally well regarded in Sacramento 
because of the energy and the expertise, and his analytical 
ability, and intelligence that he brings to this job. I 
strongly recommend that he be confirmed. 

Thank you. 

SENATOR PETRIS: Any questions of the witness? 

Next witness. 

MS. GIRSH: Thank you, Mr. Chair and Members. 

I'm Terri Girsh with the California Association of 
Children's Hospitals. 

Children's hospitals are regional tertiary care 
centers that take care of the sickest of sick children. We're 
also heavily dependent on the Medi-Cal program. We average 
over 70 percent Medi-Cal in volume. 

We've had the pleasure of working with 
Mr. Rodriguez in his previous post as head of the Medi-Cal 
program. He's always been willing to work with us on difficult 
policy, as well as reimbursement issues. And we strongly 
|recommend your consideration of him for this new position with 
i the Department of Health. 



47 

Thank you. 

SENATOR PETRIS: Thank you. 

Next. 

MR . SHANBOUR : My name is Fred Shanbour . I'm 
Chairman of the CMAC Commission. 

I have had the pleasure of working with John under 
this capacity that he's in today, and in a lesser one that he 
had yesterday. 

I have to tell you that it is with a breath of 
fresh air when I call him, when we need him, his door is 
always open to us . 

We don't always get everything we ask for; however, 
I understand that, too. 

But I do recommend with all my soul the 
confirmation of this man. 

Thank you. 

SENATOR PETRIS: Thank you. 

MS. WOLEN: Mr. Chairman, Members, my name is 
Judith Wolen. I represent the California Reproductive Health 
Association. CRHA is an organization of about 120 family 
planning and maternal-child health clinics throughout the State 
of California. 

Through working with him in the past five years — 
I've had several opportunities to work with Mr. Rodriguez on 
several issues, including Medi-Cal, family planning, and 
maternal and child health issues — I have always found him 
extremely knowledgeable in the issues, always accessible. 



48 

I have to say that it ' s rare that you can always 
get appointments so quickly with someone at his level, but it 
has been wonderful to be able to work with him over the years. 

I do have to say we haven't always agreed, also. 
There have been some things that we didn't always get our way 
on, but I do have to say I do respect him. I think he has a 
great knowledge of the issues, and I truly support his 
confirmation . 

Thank you. 

SENATOR PETRIS: Thank you. 

MR. GORDON: Mr. Chairman, Members of the 
Committee, I'm Milton G. Gordon, this Committee's appointee to 
the California Medical Assistance Commission. 

I'm here this afternoon to support the confirmation 
of John Rodriguez . 

I want to give you a very short bird's-eye view of 
my contact with Mr. Rodriguez. I've been on the California 
Medical Assistance Commission, which is — does the selective 
provider contracting for Medi-Cal with hospitals, for almost 
two years now. And for these past two years, it has been a 
real pleasure to work with Mr. Rodriguez. 

I have listened to the repetition of some of these 
ad hominum observations that have been made regarding 
Mr. Rodriguez, but I must tell you that it's 180 degrees 
opposite of what my experience has been. With me, 
Mr. Rodriguez has always been very forthcoming, very 
cooperative, and always a straight shooter. 



49 

I also believe that since the advent of Dr. Molly 
Joel Coye as Director of the Department of Health Services, 
that it's been like a breath of fresh air working with the 
Department of Health Services. I think that Mr. Rodriguez 
would be a splendid appointment to carry out the policies of 
Dr. Coye, and in further working with the California Medical 
Assistance Commission. 

Any questions? 

Thank you, Mr. Chairman. 

SENATOR PETRIS: Thank you, Mr. Gordon. 

MS. KELCH: Mr. Chairman and Members, Deborah Kelch 
of the California Association of HMOs. CAHMO represents 35 
HMOs in California, with more than 10 million enrollees. 

Our membership is supporting the confirmation of 
John Rodriguez . 

I'd like to say that myself, in my own professional 
experience, have had the opportunity to work with John over a 
period of ten years, when I was working for the State Senate 
and State Assembly, and now at CAHMO. And my experience with 
John, although given the diversity of my positions, we haven't 
always agreed on the substance of the issues, my experience 
with him is that he's bright, he cares. He gives you his time 
and his energy to try to make things work . And I think that ' s 
the kind of person we need today in the Department of Health 
Services and government, because we have some tough problems to 
solve. 

So, I recommend his confirmation to you. 



50 

SENATOR PETRIS: Thank you. 

Any others in support? 

Any persons here to testify in opposition? Come 
forward, please. 

MS. MENEFEE: Good afternoon, Committee. My name 
is Theresa Menefee. 

I have several issues of concern in reference to 
Mr. Rodriguez's appointment. And they're based both in the 
management level of his management expertise with the 
Department . 

SENATOR PETRIS: Excuse me. 

Are you here as an individual, or are you speaking 
for any organization? 

MS. MENEFEE: I'm as an individual. 

SENATOR PETRIS: Okay, thank you. 

MS. MENEFEE: I'll make this short and brief. 

I submitted a letter back on May 13th, and it 
addressed several concerns that I had. 

Also I have been through a discrimination issue 
with Mr. Rodriguez, who gave me a letter of apology in 
reference to the discrimination issue, who also made a 
statement in a settlement agreement that he would provide 
training to the Department's management staff within 180 days 
from the signing of the agreement. That training did not 
happen until February of this year. 

In the midst of that, I had another discrimination 
incident that happened to me in the Department, DHS, not 



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directly under Mr. Rodriguez, but I felt that if this training 
had of been initiated, maybe I wouldn't have to go through that 
same issue again. 

In reference to Mr. Rodriguez, I worked with the 
Medi-Cal Eligibility Branch that Mr. Rodriguez was the Deputy 
Director over Medi-Cal. And I was literally told by his branch 
chief that he supervises that I was not to be in the hall or in 
my cubicle associating with other employees of my ethnic group 
because staff were intimidated by it. 

This was brought to Mr. Rodriguez, and it took a 
year-and-a-half for the Department, under Mr. Rodriguez, to 
make a decision. 

Also, currently now, there are issues that are 
going on in Health Services under Mr. Rodriguez, in his group 
FIMD, which is under Medi-Cal, where a watermelon was placed on 
an individual's desk of my ethnic group, and the note was 
attached to it stating that all individuals of this group liked 
to eat watermelon. This is another issue that's been 
prolonging with the Department under Mr. Rodriguez. 

Then there's incidents of his management, as far as 
his branch chiefs doing business, using state funds, misuse of 
state funds, to conduct personal businesses with their own — 
as laundromat businesses, or things that are not state-related. 

There's also issues of husbands and wives working 
under the same division. Jack Toney is the Division Chief over 
Medi-Cal Benefits. Janet Toney, his wife, is a Branch Chief is 
Medi-Cal Benefits. 



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There is an individual that works under Janet 
Toney, named Carl Miller, who told an employee to suck off. 
This was elevated up to Mr. Rodriguez's level, and nothing was 
ever done about it. 

Another issue is, there's a Tameron Mitchell that 
works under Mr. Rodriguez whose husband works under 
Mr. Rodriguez, or was working under Mr. Rodriguez. I have 
heard over the last couple of weeks that has been changed. I 
am not sure. 

In overall of all these things, I have come to the 
Senate Committee and asked that, on my behalf, that they 
strongly look at this appointment. I mean, no one knows where 
I could be five years from now. I could be back at Medi-Cal, 
and I would hate to have to go through a triumph of another two 
years dealing with issues of being treated unfair, favorable 
treatment based on management, upper level, not addressing 
issues that are being brought to them. 

And basically, those are my concerns. 

SENATOR PETRIS: Thank you. 

Are there any questions of this witness? Senator 
Mello. 

SENATOR MELLO: I handed him a letter, and it looks 
like that's the same letter that you have. Would you take a 
look at it? 

MS. MENEFEE: That's it. 

SENATOR MELLO: Your letter was not signed. 

MS. MENEFEE: Well, there's two of them. There was 



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that one, and then there was another one that went to Nancy and 
Peter Hansel. 

SENATOR MELLO: So, at any rate, you know where the 
source of the letter is from. 

MS. MENEFEE: And one other issues, I'm sorry, that 
I forgot to mention. 

Also, the time frame that the Department uses to in 
reference complaints. Now, I keep getting different stories on 
this. One says it's up to the higher management level, and 
others say it's policy issue. I'm not for sure, but DHS ' s 
history of following up on complaints, and I'm speaking 
especially when I was under Mr. Rodriguez in Medi-Cal, it took 
a year-and-a-half . Their reasons were several: we don't have 
enough staff; budget is low; things of that nature. 

Bottom line is, everyone's here to do a job, and 
you can't tell a person you're going to pay them next week 
because you don't have enough staff to pay them. It doesn't 
work like that. 

Also, I'd like to address the fact that I did a 
study. I went over to SPB, and I found out that DHS ' s 
percentage for adverse actions based on ethnic group was 31 
percent Black, 15 percent Hispanic, and 4 percent other. And I 
think that should be looked into. 

SENATOR PETRIS: I have a question — 

MS. MENEFEE: Sure. 

SENATOR PETRIS: — on the incident you mentioned, 
where there was an agreement that a certain thing ' s going to 



54 
happen within — 

MS. MENEFEE: One hundred eighty days from the date 
of the signing. 

SENATOR PETRIS: Then you said it wasn't done until 
February, but that doesn't give me a figure. 

How many days past the 180 does that mean? 

MS. MENEFEE: Well, the agreement was signed in 
October of '90, and the training should have been done in April 
of '91. The training was not done until February of '92, so 
approximately 10-11 months later. 

SENATOR PETRIS: Okay, thank you. 

MS. MENEFEE: And if you'd like copies of my 
letters, I can leave them up here. 

SENATOR PETRIS: Thank you. 

MS. MENEFEE: Thank you. 

SENATOR PETRIS: Any other witnesses? 

Okay, Mr. Rodriguez, would you care to respond? 

MR. RODRIGUEZ: I'm not prepared to respond — I 
tried to take notes here on the issues. 

Let me just say that — at the outset, that I will 
not tolerate acts of discrimination that are brought to my 
attention, and I will actively work to try to correct those 
situations after they occur. 

Although I must say that I think some of the things 
we need to do is not so much focus on the after-the-fact. It's 
take pro-active measures to prevent it at the front end. 

I do deal straight when investigation shows that, 



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indeed, discrimination occurred. As Ms. Menefee mentioned, I 
wrote her a letter of apology. We were wrong, and she deserved 
that letter. 

Also, we missed the due date for the agreement to 
provide the training to our managers . That was something that 
was out of my control. It dealt with hiring a contractor to 
train six to eight hundred managers and supervisors in the 
Department of Health Services. I apologize for missing that, 
but it was completed, and we have accomplished that. 

I also believe that that's an example, too, of how 
we can help address some of these problems . We are never going 
to get enough staff. In fact, with the budget cuts and the 
staff cuts that are coming, we'll never get enough staff to, 
perhaps, staff the Office of Civil Rights the way we'd like to. 

I think that what we need to do a better job doing, 
though, is preventing acts of discrimination by properly 
training our managers, a well as another technique that I've 
employed, which is an open door policy to all levels of staff 
in the Department, so that to the extent a staff person who 
doesn't report directly to me feels that an act of 
discrimination has occurred, or potentially has occurred, or 
there's a concern they need to get off their chest, they can 
get to me, sit in the room, and tell me about it. And often 
what we can do is facilitate resolution of these things between 
the two involved parties . 

And in these kind of pro-active things, proper 
training, and facilitating resolution of problems before they 



I 



56 

become bigger problems, I think, are two things that I am 
committed to, to help address some of the problems that were 
just discussed. 

SENATOR PETRIS: Let me ask you, you mentioned the 
importance of training management as a preventive measure. 

How do you go about that? Who does the training? 

MR. RODRIGUEZ: We hired a contractor who — who 
does this for a living. In fact, this is a — we called it 
Diversity Training. It's really techniques on how to manage a 
multicultural workforce. 

And I don ' t mean management in the typical , you 
know, this is how you supervise technique. It's the fact that 
we're all different. We all come from different points of 
view, different cultures. And that's not wrong. That's not a 
problem. 

Sometimes things are said or done inappropriately, 
and they wee intended that way. Training's not going to change 
that. 

Sometimes things are said and done inappropriately, 
but they weren't recognized as a problem. We very much can 
address that kind of situation. 

SENATOR PETRIS: Have you been at it long enough to 
measure any improvement? 

MR. RODRIGUEZ: No, we just completed the training 
in the last month or so. We ran 600 supervisors and managers 
through it. 

I also need to point out, I don't think it's a 



57 

one-time shot. I think this is something that we need to be 
prepared not only to do again and again as new managers and 
supervisors come to us. We're not going to do a lot of that in 
the next few months and years, but that it's refresher stuff. 
And you know, trainers get better; trainers learn new 

techniques . This is something that ought to be part of our 

I 

ongoing, every year, every two years, you know, as you get 

refresher-type stuff going, for all our supervisors and 

managers . 

And we're committed to finding the money in a 
basically a budget that's not going to grow, that's probably 
going to shrink, because I think it's a priority. 

It ' s an often too often used phrase about 
prevention, but I very much believe in that. That we we invest 
a little money in this now, we're going to save two ways. 
Number one, we're not going to be spending time investigating 
as many complaints. But more important, we're going to have a 
better workforce. A workforce that feels that they are being 
dealt with honestly, and straightforward, and with respect by 
their supervisors and managers, are going to be a happier 
workforce, a more productive workforce. And I think that's the 
real value of that. 

SENATOR PETRI S: Thank you. 

Any other questions? 

Then, this will go over until next week, when we 
have, hopefully — 

SENATOR BEVERLY: Mr. Torres just returned. 



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SENATOR PETRIS: Mr. Torres, did you want to 
testify on this nomination? 

MR. TORRES: Has everybody else testified? 

SENATOR PETRIS: Yes. Do you want to come forward? 

Thanks. I missed that, Senator Beverly. 

MR. TORRES: I'll try and go slow. 

Arnold Torres, representing the California Hispanic 
Health Care Association. 

I was telling Ms. Michel today that we wanted to do 
something that we seldom ever do, and she said, "What? Not 
testify?" And I said no. 

[Laughter. ] 

MR. TORRES: I said we actually wanted to come in 
and say some very positive things about the nominee. 

The nominee has — we did not have a lot of 
dealings with him prior to his position — to his being 
nominated to this position. We had met. We had had some 
meetings, but we really had very little interaction. 

Since his appointment, he has always had a very, 
very open door. He has been very conscientious about returning 
our calls, providing access, listening to our concerns. He 
knows that we have had a lot of disagreements on a lot of 
things. We normally have a very good and open discussion. 

And I think that Mr. Rodriguez reflects the type of 
|Chief Deputy that, at that level, we really were feeling very 
jcomfortable with. And we still feel comfortable from that 
perspective. 



59 

However, we have — we have some concerns. Some 
are clearly associated with Mr. Rodriguez. You've heard from 
some of the witnesses earlier. You've had letters written to 
you about those very, very specific concerns. 

Our concern deals with the problem of it being a 
systemic issue. You asked last time, Senator Petris, when 
for. Coye was here, you said that I normally testify, and I will 
oftentimes raise issues about affirmative action, and about 
balance and equity of hiring. 

My response was that this Administration under 
Mr. Rodriguez, Mr. Joseph, and Dr. Coye basically inherited a 
very bad situation. What they inherited was lack of equity and 
— or, lack of parity with Blacks in mid-management and upper 
management positions. That has been a historical problem 
within the Department of Health Services. While Blacks have 
parity in terms of what their population in the state and what 
their population is in the workforce and in the state workforce 
is equal, they do not have that parity when it comes to 
mid-management and upper management positions. 

When it comes to Latinos, they have parity in no 
class except, I believe, in secretarial. All the other 14 
classes in the state system or out, way out of whack with 
parity. 

That is what they've inherited. You are all 
familiar with the lawsuit that has gotten the attention of the 
newspapers . That is a problem that the Department is going to 
have to contend with in or out of court, whether it be settled 



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60 
out or in the court. 

However, it is reflective of a systemic problem. 
This Department has a systemic problem. 

Now, the million dollar question is: Will this 
triumvirate of Coye, Rodriguez and Joseph, lead this Department 
into a new era? Will they provide the leadership to move them 
into an era in which parity is a concern under the 
bircumstances? But better yet, are they creating precisely 

what Mr. Rodriguez said he wants to create, which is the 

i 

environment in which employees feel comfortable that, if there 

is a problem, they feel comfortable going to their superiors, 

going through a system that has integrity and respect and 

credibility? 

But unfortunately, that is not the case under the 
present circumstances. Most state employees within the 
Department of Health Services do not feel comfortable raising 
concerns about discrimination. They do not feel comfortable 
that the system that is in place within that Department is 
going to give them their fair day in court. 

These are very, very significant and substantial 
problems that we were — it was brought to our attention quite 
aggressively by many, many people in the last three to four 
days . 

We grappled with this, because, as we said to you 
earlier, Mr. Rodriguez has provided a very strong breath of 
fresh air within that Department. Things do not necessarily 
fall through the cracks very much with him. They do with 



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■ 61 

others, Dr. Coye being one of them. 

Since we were here last, problems do continue to 
manifest themselves in that Department at that level. But we 
are pleased to say that with Mr. Rodriguez thus far, we have 
not incurred that problem. 

But we do see that the problems I've identified are 
substantial. They are significant, and they require some very 
serious attention by the leadership of the Department of Health 
Services, which does include Mr. Rodriguez. 

I don't think that the Governor, with all due 
respect to you, Mr. Beverly, I don't know if the Governor's 
that concerned about this issue. I think that when it comes to 
the financial mess that this state is in, when it comes to the 
difficult questions of health care, which everybody's aware 
have to be answered, and in some cases need to be asked, I 
think that this issue of how you treat employees is not really 
a priority. 

But it must become a priority, because it is these 
employees who have to carry out the policies of this Governor 
and of this Legislature. And if those employees are not in a 
good spirit, if they are not functioning to their highest 
productivity, then you're going to have even greater problems 
with the little money that we have now. 

And I think it must become a priority. It must 
become a priority for this Legislature to ensure that the tone 
and the poor attitude that exists in certain quarters of that 
Department are — is not allowed to continue any further into 



62 

this new administration of the two Chief Deputies and the one 
Director. 

And I believe that — I believe personally, not 
representing my organization. I must be made a distinction — 
I believe personally that Mr. Rodriguez wants to do the right 
thing. But I believe that Mr. Rodriguez and his colleagues at 
that Department need the constant reminder that this is a 
priority; that this has to be something that they incorporate 
into their agenda of priority concerns. 

I will ask, as I have attempted before, but this 
time I won ' t draft any letters . I am going to ask that the 
onus be on the Department, perhaps not on Mr. Rodriguez 
directly, but on this Department, and the onus be that they 
submit before Coye is confirmed on the Floor, and before 
Mr. Rodriguez comes out of this Committee, or before he's 
confirmed on the Floor, that a very clear plan of action of how 
this Department is going to deal with what they've inherited, 
be presented to this Committee, and that this Committee discuss 
it with the individuals and groups that have raised the 
concerns to this Committee about this nomination. 

To some extent, the request is an unfair one to be 
made to accompany Mr. Rodriguez's confirmation, because he is 
not responsible for affirmative action policies in that 
Department. It is Mr. Joseph who's the Chief Deputy for 
Operations who is . 

But I do believe that many employees feel that 
Mr. Rodriguez must be different. Why? And herein lies the 



63 

interesting things of ethnocentrism: his last name. A lot of 
employees look to Mr. Rodriguez because his last name is 
Rodriguez, and expect something different and more of that 
sensitivity. 

And so, it is an unfair expectation at times, but 
it is one that I believe someone has got to say, we've go to do 
something now. And I believe the time is now. 

The lawsuit that you saw in the paper two weeks ago 
is going to cost the state easily hundreds of thousands of 
dollars. We don't have a hundred thousand dollars anywhere to 
be spending on settling cases of discrimination. We just don't 
have that kind of money. 

First of all, we don't have any business 
discriminating. And certainly, we don't have any business 
making settlements for hundreds of thousands of dollars when we 
shouldn't have discriminated to begin with. 

So, I think that what I suggest is a very 
reasonable suggestion. I would think that some of the 
Department will not like me, but then, they don't like me 
anyway . 

But I think it is a very reasonable request to 
make. I think it is a sound request, and I hope that the 
comments that I've made will be accepted in the spirit that 
I've presented them. They're not personal against Mr. 
Rodriguez. As I say, personally I believe he wants to do the 
right thing. And personally, I believe he has done a very good 
job insofar as discussing the policy issues that he's 



64 
responsible for in the program. 

But again, the constant reminder must be provided, 
and I believe that this Committee is the appropriate entity 
within the process to do that. 

I appreciate the time, and I hope I didn't misquote 
you, Ms. Michel. 

SENATOR PETRIS: Any questions of Mr. Torres? 

SENATOR MELLO: Just a comment on his request. 

I think you have to bear in mind that Dr . Coye ' s 
bne-year date is up this Friday, which means our only session 
to take her, she's on the Floor now, to be put up for 
confirmation will be tomorrow. 

So, I don't know if she can satisfy your request. 
With Mr. Rodriguez, it'll be a little bit longer than that. 

I just don't think that Dr. Coye can respond to 
your request by tomorrow in the manner you want it to be. 

MR. TORRES: I would suggest, then, that — and I 
would suggest that it be as much of a bipartisan effort as 
possible. I believe that a letter from this Committee — which 
Mr. Michel can draft very absolutely appropriately and 
effectively — I think that a letter drafted from this 
Committee with five Members to Dr. Coye raising what I have 
just suggested in the manner that Ms. Michel and this Committee 
feel comfortable with, I think — 

SENATOR MELLO: How about you draft a letter, send 
it to us, and we can refer it to her? 

MR. TORRES: Well, I would be more than happy to 



65 
draft that letter if the letter is taken the way it's drafted. 

But unfortunately, I am not a Member who's elected, 
and I do not work for the Senate. And oftentimes, that 
requires editing of the work that I do, and I'd just as soon 
not go through that headache and disappointment. 

So, I think it's best that it stay with this 
Committee. But I think the concerns and the witnesses and the 
letters that you have in front of you — I'd be more than happy 
to comment on the letter and make some suggestions, but I'd be 
more than happy to work with Nancy in doing that as well. 

I do think if it is a bipartisan effort on this 
issue, I think that — I believe that Dr. Coye would get the 
message. 

And contrary to the article in the paper, I do not 
think that Dr. Coye is being held up for personal reasons. I 

would like to hold up Dr. Coye for a number of other reasons, 

i 

besides just Ward Valley. But, then again, I'm not elected, 

and I don't sit in the Senate. 

So again, thank you very, very much. And I'd be 
more than happy to work with Nancy if that's necessary. 

SENATOR BEVERLY: How do I characterize your 
testimony? Are you in opposition? 

MR. TORRES: No, sir. 

SENATOR BEVERLY: You're concerned? 

MR. TORRES: Just with concerns. 

SENATOR BEVERLY: Third column. 

MR. TORRES: There you go, that third column that I 



66 
try to always walk a fine line. 

Thank you very much. 

SENATOR PETRIS: That newspaper comment, quoting 
somebody, said — I don't think it said personal reasons. It 
said "petty personal reasons", which I, as a Member of this 
Committee, strongly resent. 

I've been on this Committee a long time, and I've 
taken on an awful lot of witnesses. I voted for 98 percent, 
going all the way back to Governor Reagan. I stood up to 
Governor Jerry Brown. We dragged out our hearings — didn't 
drag them out, but took three weeks on a nomination of his, and 
we dumped him. 

I ' ve never seen the person who made that comment 
oppose any Republican Governor's nomination, and I think that 
statement ought to be withdrawn and so forth, because that's 
not the way we do business. 

MR. TORRES: That's right. 

SENATOR PETRIS: You know that as well as anybody. 

MR. TORRES: I agree; that's right. 

SENATOR PETRIS: Any further questions from the 
Committee? 

All right, Mr. Rodriguez. We'll see you again a 
week from today when the other two Members, hopefully both 
Members, are here, but certainly at least one of them will be 
here. 

MR. RODRIGUEZ: Thank you for your time. 

SENATOR PETRIS: Thank you very much. 



67 
[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
4:10 P.M. ] 

— 00O00 — 



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CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of 
the State of California, do hereby certify: 

That I am a disinterested person herein; 
that the foregoing Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel 
or attorney for any of the parties to said hearing, nor in 
any way interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my 
hand this Q<a day of May, 1992. 




IVELYIT J. MIZAK 
Shorthand Reporter 



£* 



fuC 






201-R 

Additional copies of this publication may be purchased for $5.50 per copy plus 
current California sales tax. 

Senate Publications 
1100 J Street, B-15 
Sacramento, CA 95814 

Make checks payable to SENATE RULES COMMITTEE. 

Please include Senate Publication Number 201-R when ordering. 



HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, JUNE 3, 1992 
2:10 P.M. 



DOCUMENTS DEPT. 

JUL 13*92 

Hi ■ • • * 



202-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 
ROOM 113 
SACRAMENTO, CALIFORNIA 



WEDNESDAY, JUNE 3, 1992 
2:10 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 
2 APPEARANCES 

a MEMBERS PRESENT 

4 SENATOR NICHOLAS PETRIS, Acting Chair 

5 SENATOR ROBERT BEVERLY 

6 SENATOR HENRY MELLO 

7 MEMBERS ABSENT 

8 SENATOR DAVID ROBERTI, Chairman 

9 SENATOR WILLIAM CRAVEN, Vice Chairman 

STAFF PRESENT 

CLIFF BERG, Executive Officer 
PAT WEBB, Committee Secretary 
RICK ROLLENS, Consultant on Bill Referrals 
NANCY MICHEL, Consultant on Governor's Appointments 

ALSO PRESENT 



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STEFAN L. MANOLAKAS, Member 
California Horse Racing Board 



DENNIS HUTCHESON, Executive Secretary 
„ California Horse Racing Board 



RICHARD A. BILAS, Member 

State Energy Resources Conservation and Development 



19 

20 

ARLENE N. HEATH, Commissioner 

2| Workers' Compensation Appeals Board 

22 ! SENATOR QUENTIN KOPP 
i 

23 DAVID WERDEGAR, M.D. , Director 
Statewide Health Planning and Development 

24 

DERRELL KELCH, Legislative Advocate 

2 5 California Association of Homes for the Aging 

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Ill 



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APPEARANCES (CONTINUED) 

JANE S. WIEGAND, Commissioner 
Workers ' Compensation Appeals Board 

SENATOR ED DAVIS 

CASEY YOUNG, Administrative Director 
Division of Workers ' Compensation 



IV 



INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 



Statement by SENATOR PETRIS to Put Over Hearing 

of JOHN RODRIGUEZ, Chief Deputy Director, Department 

of Health Services, for One Week 1 

STEFAN L. MANOLAKAS, Member 

California Horse Racing Board 1 

Questions by SENATOR MELLO re: 

Letter Response to SENATOR TORRES ' s Inquiry 

on Ethnic, Racial and Gender Breakdown of 

CHRB ' s Employees 2 

Breakdown on Stewards 3 

Steps Taken to Bring about Parity 4 

Influence on Filling Steward Positions 6 

Statement by SENATOR MELLO on Putting Over 

Appointment for One Week 9 

Questions by SENATOR BEVERLY re: 

Letter to SENATOR TORRES 9 

Response by DENNIS HUTCHESON, 

Executive Secretary, California 

Horse Racing Board 10 

Grandfathering in Existing 

Stewards in 1988 Legislation 10 

Minority Groups on Eligibility 

Lists 10 

Completion of Examinations 10 

Stewards and Veterinarians Prohibited 

from Being Civil Service 11 

Development of Affirmative Action 

Plan in 1990 11 



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Placement of Women Stewards 11 

Questions by SENATOR MELLO re: 

Relevancy of Examinations to 

Positions 12 

Number of Minorities Actually Hired 14 

Committee Action 17 

RICHARD A. BILAS, Member 

iState Energy Resources Conservation and 

Development Commission 17 

Background and Experience 17 

Questions by SENATOR PETRIS re: 

Coordination between Commission and Air 

Resources Board and Public Utilities 

Commission 19 

Testing Program for Alternative Fuels 

Vehicles 20 

Involvement of Private Companies 21 

Japanese Claim of New Battery 21 

Electric Cars in Other Countries 22 

Need for Inducements 24 

Motion to Confirm 24 

Committee Action 25 

ARLENE N. HEATH, Commissioner 

Workers' Compensation Appeals Board 25 

Introduction by SENATOR QUENTIN KOPP 26 

Background and Experience 27 

Career as Attorney 28 

Teaching Career 29 

Career as Labor Arbitrator 29 

Role of WCAB 30 



VI 



Questions by SENATOR PETRIS re: 

Numbers of Cases Handled 
Stress Involved 

Success of Deadline Imposition 

Backlog 

Motion to Confirm 

Committee Action 

DAVID WERDEGAR, M.D., Director 

Statewide Health Planning and Development 

Background and Experience 

Witness in Support; 

DERRELL KELCH, Legislative Advocate 
California Association of Homes for the Aging 

Questions by SENATOR PETRIS re: 

Coordination with Local Health Officers 

Epidemics 

Position on Mandated Immunization of 
Children 

Favorite Philosopher 

Motion to Confirm 

Questions by SENATOR MELLO re: 

Possible Linkage between Appointee and 
University of California at San Francisco 

Research Project 

Legislative Counsel Opinion on Contract 

Suggestion by NANCY MICHEL to Obtain Legislative 
Counsel Opinion on Contract while Appointee 
Awaits Confirmation on Senate Floor 

Discussion 



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Vll 



Question by SENATOR PETRIS re: 

Fear of Undue Influence by University 

Committee Action 

JANE S. WIEGAND, Commissioner 
Workers ' Compensation Appeals Board 

Introduction by SENATOR ED DAVIS 

Background and Experience 

Questions by SENATOR PETRIS re: 

Tenure on Board 

Flaws in System Due to Defective Statutes 
or Regulations 

Motion to Confirm 

Committee Action 

CASEY YOUNG, Administrative Director 
Division of Workers ' Compensation 

Background and Experience 

Motion to Confirm 

Committee Action 
Termination of Proceedings 
Certificate of Reporter 



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P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

SENATOR PETRIS: We have a whole bunch of 
appointments today. On one of the appointments, we're going to 
put over the hearing until, once again, next week. That's 
number three, Mr. Rodriguez. 

Are there people here to testify on that subject? I 
understand you're all local, from Sacramento, so there's no 
problem about coming back. I wanted to let you know up front so 
you don't lose a lot of time unnecessarily. You're welcome to 
stay. 

[Thereupon the Rules Committee 
acted upon legislative agenda 
items . ] 

SENATOR PETRIS: Now, Mr. Manolakas . Welcome back. 
This is, what, your fourteenth appearance? 

MR. MANOLAKAS: Just the third, Senator. 

SENATOR PETRIS: Did you ever get to complete your 
statement? I guess you did. 

MR. MANOLAKAS: Yes, I did. 

SENATOR PETRIS: Then Senator Mello needed to get a 
little more information, I recall, and he asked that this matter 
go over. 

Are there any persons here who desire to testify 
either in favor or in opposition to the confirmation of 
Mr. Manolakas? 

Senator Mello, did you have any questions? 



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SENATOR MELLO: We got this letter back from you. I 
guess this was sent to Senator Torres back in April when he 
asked you about your ethnic, racial, gender breakdown of the 
Horse Racing Board's employees. 

Could you just briefly cover your response? 

MR. MANOLAKAS: Senator Mello, I had an opportunity 
to review that letter when it first crossed my desk a couple of 
months ago . 

That letter was forwarded to you by the Executive 
Secretary, Mr. Hutcheson, who's here today, and I think would be 
probably more thorough in discussing that letter with you, if 
you'd like to have him explain the contents. 

SENATOR MELLO: Well, that's kind of you, but I think 
you, as a member of the Board, probably have the responsibility 
for overall policy direction on how the Board will operate as 
far as this issue, and that is the hiring of people from 
different ethnic backgrounds in accordance with the population. 

I don't support quotas, per se, but I do support 
trying to bring parity to the hiring process . A lot of people 
have been disenfranchized, apparently: Blacks, the Hispanics, 
Native Americans, and so forth. 

What I'd like to hear from you, I've heard some of 
the testimony that you gave last week was sort of a broad run of 
what your policies might be. This is quite a lengthy report 
that I just got today and I haven't had a chance to really 
review it . 

MR. MANOLAKAS: Senator Mello, my understanding is 



3 
that for the civil servants that are under the CHRB staff's 
direction, we are exceeding, far in excess, of the requirements 
imposed for the statute in the ethnic mix that we have working 
for the CHRB. 

It ' s also my understanding that the people that are 
contracted for with regard to the stewards that are hired, that 
they are not civil servants. There is no requirement, but there 
is a definite attempt on the part of the CHRB staff and the 
Stewards Committee, of which I am not a member, to bring some 
ethnic diversity to the stewards. 

SENATOR MELLO: Well, the point is, whether they're 
civil service or not, I think that's not a proper reply to give 
to the people who are disenfranchized for jobs just because one 
position may hold an exempt status, and the other one does not. 

But I'm interested in the overall policy, standards, 
of the Board, and the jurisdiction of which you have. For 
example, right here, as pertains to stewards, where they have 
51, stewards only have one Hispanic and nine female, 54 male. 

Out of the veterinarians, you have only one Hispanic. 

What's your response to those kind of figures? 

MR. MANOLAKAS: With regard to the stewards, once 
again, I'm not on the Stewards Committee, so I don't have direct 
contact with the appointments and how they ' re made . But it is 
my understanding that the associate steward position was created 
so we can bring in additional people with the desire to have a 
more ethnic mix than currently exists . 

I don't have any information with regard to the 



4 

veterinarians and how they are hired, and I apologize for that, 
but that is not something that ' s directly under my 
responsibility. 

SENATOR MELLO: You say directly. Are they 
indirectly? 

MR. MANOLAKAS: Well, I think it's yes, certainly. 
As a policy matter, there's no question, and I believe very 
firmly what I stated before, that there is a desire on the part 
of the Board, certainly myself, to provide additional ethnic 
diversity in all areas. And I think that we are making those 
attempts and we're succeeding. 

SENATOR MELLO: What steps have you taken to bring 
about a greater parity and equity in regard to greater ethnic 
hiring? 

MR. MANOLAKAS: As I indicated, with regard to the 
associate steward position, which was created so these people 
that are going to be brought up through the ranks can gain the 
experience that our stewards now have, that those positions, as 
they come up, it's my understanding that the Stewards Committee, 
along with the CHRB staff, are attempting to bring greater 
ethnic diversity as part of this new hiring practice that has 
been implemented. 

SENATOR MELLO: Is that assistant to the steward an 
ethnic person or a female? 

MR. MANOLAKAS: I believe they're just trying to 
bring more diversity. I know that — 

SENATOR MELLO: I mean, what is gender of that person 



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II 

12 

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5 

or the ethnic background? 

MR. MANOLAKAS: I don't have any specifics. I know 
that they are making an attempt to both bring diversity in the 
way of ethnicity as well as gender. 

SENATOR MELLO: You said, if I recall, that part of 
your action had been to bring in was it an assistant to the 
steward? 

MR. MANOLAKAS: We have an associate steward 
position. 

SENATOR MELLO: Now, is that associate steward 
position held by a female or a member of the ethnic community 
that are classified as minorities 

MR. MANOLAKAS: Well, there are a number of associate 
stewards, and I don't have the — either the racial breakdown or 
the gender breakdown. I believe it's provided in the letter. 

Unfortunately, I just don't — I don't have that 
information at hand. I know it's in there. 

And I know, again, Mr. Hutcheson is prepared, has all 
that information. 

SENATOR MELLO: If I may ask Ms. Michel if she could 
relate to that question from the letter? 

MS. MICHEL: The only listing is the listing for the 
stewards. There's no listing here for the associate stewards. 

And of the 51 stewards, there's one non-White out of 
51 on the list given to us. 

SENATOR MELLO: One out of 51. That's about two 
percent. 



6 

MR. MANOLAKAS: I understand. 

SENATOR MELLO: At a time when the Anglo population 
in California how has dropped below 50 percent. 

MR. MANOLAKAS: I appreciate your concern. And as I 
indicated, I think every attempt is being made to bring 
additional diversity to the stewards. 

The way the CHRB works , we operate under a number of 
different committees. I serve on Parimutual; I serve on 
Medication, and I'm not involved with the Stewards Committee. 

I've only been a Board member now, I think, for eight 
or nine months , so I haven ' t had any direct experience as to the 
thought processes that one goes through in selecting the 
stewards, other than my contact with the Executive Secretary, 
and he has indicated to me that the associate steward's 
position, in which people are brought up and trained to become 
stewards, that it is through that process that we are attempting 
to provide more diversity, both from a gender standpoint and 
ethnicity. 

SENATOR MELLO: You used the word "direct" again. I 
want to repeat the question I asked: don't you have any 
indirect influence on how these positions are going to be 
filled? 

MR. MANOLAKAS: I think as a Board member, certainly. 
We set a policy, and that policy has to be implemented by the 
committee. 

I think what I'm trying to tell you is, as a Board 
member, that issue has not been brought to me, and I have not 



7 

been able to effect any policy with regard to that simply 
because it hasn't been an issue as of to date. 

SENATOR MELLO: You were not aware that this 
imbalance was there in the department? 

MR. MANOLAKAS: I wasn't aware that there was one 
person out of — I think you said some 51 that a non-White. No, 
I was not. 

SENATOR MELLO: Doesn't the Board — I'm not really 
familiar with how the Board operates. I know you said you're on 
a certain committee, but don't they collectively deal with 
overall policies set forth by the Horse Racing Board? 

MR. MANOLAKAS: Yes, certainly, the Board sets the 
overall policy. There's a tremendous amount of deference that's 
paid to the committees assigned to various tasks, and the 
Stewards Committee being one of those committees . 

I just haven't been — to be quite frank, it hasn't 
come up before me. 

SENATOR MELLO: Well, a lot of things don't come up 
simply because we sort of live in an isolated world. But, you 
know, one has to look outside, beyond the isolation and see what 
the real world's all about, and see whether or not people in our 
society that are from different ethnic groups do have an 
opportunity to have access to employment and opportunities. 

And this Rules Committee right here has taken a 
position, and we relayed this on to the Governor, that we want 
to see more ethnics appointed to boards and commissions 
appointed by the Governor. Our own appointments have been 



2 
3 

4 

3 
6 



8 
highly weighted towards ethnic breakdown and women appointments . 
And that's been an expressed policy of our Rules Committee. I 
believe it was taken, what, about a year ago, and that's a 
matter of record. 

So, that's where we're coming from. And I think that 
pretty well, number one, reflects what the laws of the state and 
the federal government are as far as affirmative action. And it 
pretty well reflects, I think, what the moral concerns are that 
we have, to make sure that people from all walks of life have 
access to opportunities that are within our society, especially 
when they're operated under governmental rules and regulations, 
should follow those, not guidelines, but they should follow 
those examples fully. 

MR. MANOLAKAS: And I agree with you. 

SENATOR MELLO: Yet you say you were not aware that 
we only had one out of fifty-one. So, I guess you just haven't 
asked the questions in there as a member of that Board, even 
though for eight months you haven't looked around and said, 
"What is our hiring policy? What is our breakdown of our ethnic 
and gender make-up of employees that we have under our 
jurisdiction, both directly and indirectly?" 

MR. MANOLAKAS: Senator Mello, directly, I know that 
we're, I think, at close to 40 percent in our ethnic diversity 
with regard to civil servants. So, I was aware of that. 

With regard to the stewards, I know the constraints 
are a little bit more severe. I know that, for instance, the 
experience level is something that has played a significant 



9 
factor in making sure that the stewards, who are essentially- 
running the tracks and running the races, have that degree of 
experience. 

But I also appreciate your concerns and comments, 
that we need to provide more ethnic and gender diversity at the 
stewards level. It's something that as a Board member I can, it 
now being brought to my attention, I can certainly look into. 

SENATOR MELLO: Okay, thank you. 

SENATOR PETRIS: Any others? Senator Beverly. 

SENATOR BEVERLY: Should we vote today? 

SENATOR MELLO: Well, I can't vote for him today 
personally, because I feel very strongly about ethnic make-up. 

But I don't want to hold up his appointment, I mean, 
hold it up other than I would recommend putting it over until 
another Member of the Rules Committee gets here, and then he'd 
have a chance of being confirmed on that basis. 

But you're not the first one. I have voted against 
probably eight or ten people for the same reasons, because I 
think somebody has to take a strong stand to make sure that 
we're going to stand up for these issues that are really 
important to all of us here and our country. 

SENATOR BEVERLY: It appears he should go over, 
Mr. Chairman, but maybe before we do that we ought to clarify 
the situation on the stewards. 

I was reading this letter as Senator Mello was 
questioning you. I wonder if we could have Mr. Hutcheson come 
up. 



10 

You can clarify for me, apparently the Board took 
over the hiring of stewards in 1988. Before that, they were 
hired by the tracks? 

MR. HUTCHESON: That's correct. 

Dennis Hutcheson, Executive Secretary for the Board. 

In July 1, 1988, the Legislature shifted 
responsibility for the hiring of stewards from the race tracks 
to the California Horse Racing Board. In that same legislation, 
which was SB 14, authored by Senator Maddy, the legislation 
grandfathered in the existing stewards . Those stewards have 
been working for the industry for 10, 15, 20 years, 30 years in 
some cases . 

To the extent that openings become available, we have 
attempted to get minority groups into the eligibility lists. 
The numbers that you see on my memorandum to Senator Torres is 
an indication of the number of stewards that have been active in 
California, as well as the number of individuals that have 
passed the examinations that we have given now to encourage 
greater participation of minorities in the industry. 

Those numbers simply reflect those individuals that 
have passed the examinations last year. Unfortunately, there 
were very few minorities that took the examination, and there 
were very few that passed the examination. 

We — the first year that we gave the examination, we 
required an 80 percent completion rate for passage. Last year, 
we reduced that to 70 percent in hopes of gaining more 
candidates to eligibility for stewards. 



11 

Again, I would point out that we currently have four 
race tracks running in California: Los Alamitos, Hollywood 
Park, Golden Gate Fields, and Cal Expo. Cal Expo is a harness 
racing meet. I don't believe there are any minorities on our 
eligibility lists for that meeting, for harness racing. 

We have the two thoroughbred tracks running. There's 
six stewards that work those two tracks. Those are individuals 
that have worked previously, before the Board took over July 1, 
1988, and are currently assigned there. 

And I would point out that stewards and official 
veterinarians are personal service contractors; they are not 
civil service employees. The Legislature, in the Business and 
Professions Code, specifically prohibited them from being civil 
service employees . 

So, as Commissioner Manolakas pointed out, we are 
making an effort to bring minorities into the steward status. 
When I became Executive Secretary, July, 1990, one of the first 
things that we did was develop an affirmative action plan, which 
was not required of us previously. We have tried to meet those 
goals. We've upped our minority staff to almost 40 percent out 
of some 66 staff persons. 

My assistant executive secretary is Japanese. My 
assistant executive secretary of security is Hispanic. My chief 
investigator is Hispanic. 

I've place two women stewards into the thoroughbred 
stewards' stands. They're the first two women to be in those 
position in the country in major thoroughbred racing. We've 



12 
placed another female steward in the fair circuit. We have a 
female steward on the associate steward on the fairs. 

And again, as Commissioner Manolakas pointed out, we 
will make every effort to comply with the Legislature's wishes 
to bring minority groups into these positions, but we have very 
few positions available. We have a seniority basis on which we 
work under. And given that, we're still attempting to bring in 
minorities, and we will continue, and we will relay your message 
back to the remainder of the Board so that they are aware of 
that also. 

SENATOR BEVERLY: Thank you, Mr. Hutcheson. 

I wanted to clarify your letter a little bit. I 
think Senator Mello's concerns are valid, but I thought there 
was more to it than we had before us. 

I have no objection to him going over, if that's the 
wish of the Committee. 

SENATOR PETRIS: Senator Mello? 

SENATOR MELLO: Just a follow-up to that point. 

When you said you provide them with examinations, are 
these examinations relevant to the job that they are applying 
for? 

MR. HUTCHESON: Yes, they are relevant to the job 
that they're applying for. They're based on criteria and 
requirements that the Legislature included in SB 14. For 
requirements to even take the examination, which require a 
minimum of five years' experience as an owner, or a trainer, or 
a jockey, and then there are some other qualifications there 



13 
that have to be met . 

So, it requires that the individual be participating 
in the horse racing industry for a number of years and gain the 
knowledge that a steward requires, which is knowledge of the 
entire industry, so that they will have to perform various 
associate-official type positions to qualify to take the 
examination. 

Again, we are reaching out to minority groups. I've 
spoken to the Jockeys Guild about minority jockeys to bring them 
into California as stewards. 

The Legislature passed a bill last year which 
requires, to the point when feasible, that we would have at 
least one jockey in the stewards' stands at all times. And so, 
we're attempting now to recruit ex- jockeys that want to become 
stewards into California. I've spoken to Frank Oliveras about 
coming to California and working as a stewards, but he's a 
successful trainer. He can make more money doing that than 
becoming a steward. 

We will continue and put every effort forward to 
bring minorities into the stewards' stands, just as we have done 
in the staff of the Board. 

SENATOR MELLO: All right. 

It's been known a lot of times you can screen out 
people by giving them a test that no relevancy to their duties, 
and that way they can never be qualified. That's point number 
one. 

But the other point from your letter here, on page 4 



14 
it says: "Minorities on List" and "Total Candidates on List". 
For steward, veterinary services, you have one minority and 
total candidates, four. Steward running races, 12 minorities; 
35 total on list. Steward harness races, 5 minorities; total 
candidates 5 on list. Medication steward, 4 out of 12. 

The question is, how many of these minorities were 
actually hired? 

MR. HUTCHESON: To date, we have not hired any of the 
minorities that are on the eligibility lists. 

What we have done is, there's been three openings, 
and we have moved two females into those positions, and we've 
put one jockey into the Golden Gate Fields stand because the 
legislation requires that we have a jockey in the stands, and 
there was no jockey in the stewards' stands on the northern 
thoroughbred circuit. 

We are attempting to comply with legislation that 
requires a jockey to be in the stands, and also comply with our 
own affirmative action plan, which brings more minorities into 
the stewards . 

We have not had the openings to place individuals in 
there. The only option that we would have would be to terminate 
contracts with existing stewards to hire individuals off our 
eligibility lists. 

SENATOR MELLO: So when you say you're making every 
effort, you haven't actually hired any of these minorities that 
are on the list then? 

MR. HUTCHESON: We have not, but we have not had the 



15 
openings to place those individuals into yet. When the openings 
do become available, which we have one at Del Mar, and I have 
talked to several individuals about the possibility of working 
at Del Mar for the meeting down there, we will place a minority 
in that position. And I've already spoken to a candidate about 
that. 

SENATOR MELLO: But you have filled three positions 
with non-minorities, then? 

MR. HUTCHESON: Pardon me? 

SENATOR MELLO: You said you haven't had any 
openings, but you just said you did fill three positions from 
non-minorities . 

MR. HUTCHESON: I filled them with two females, which 
have never been in the stewards ' stands in the thoroughbred 
circuit, and one jockey, which is basically required by 
legislation in the northern thoroughbred circuit. 

In the Del Mar associate steward position, we will 
place a minority into that position, and I've already spoken to 
two candidates about that. 

SENATOR MELLO: Isn't affirmative action also part of 
the law? 

MR. HUTCHESON: Affirmative action is part of the 
law. These are personal service contracts, and it — the law 
requires that we look into minority hiring practices in 
fulfilling those contracts, and we are doing that. 

SENATOR MELLO: And I've heard these words before, 
when you say "we're looking into it," "we're trying to the 



16 

extent possible," that just doesn't get it. You know, you 
either have to do it or not do it . And your looking at 
something, it means just looking at something. 

And trying to the fullest extent possible, we can go 
— you know, when I see an advertisement for employment and it 
says, "We are an equal opportunity employer," well you can be an 
equal opportunity employer and never hire a minority. 

And like in the high jump, you set the barrier up so 
high they can never jump over it. 

Okay, I don't want to belabor the point. But I just 
want to give another strong message to appointees that come 
before the Committee: there's one Member here of the Rules 
Committee, that I just feel we have to do a better job of 
reaching out to minorities and to women and other ethnic groups 
than we're doing. And it's come to my attention, you know, that 
the Horse Racing Board probably has one of the worst records in 
the State of California for doing that. 

And you're the Executive Secretary, and he's a Board 
member. You use words like, "they're not directly under us." I 
mean, you know, that's a cop out. Anything that's under your 
jurisdiction is your responsibility, as far as I'm concerned. 
And the job just has to get done. 

You're going to face lawsuits and face some 
tremendous things that are going to be very unpleasant, because 
people are getting impatient for waiting. 

MR. HUTCHESON: Your point is very well taken, and I 
will keep you personally apprised of our movement forward in 



17 
this area. 

SENATOR PETRIS: Any other questions? 

We'll put it over, because the other two Members 
won ' t be here today . 

We're going to have to ask you to come back again. 
I'm sorry. It'll be a week from today. 

SENATOR BEVERLY: Perhaps for vote only? 

SENATOR PETRIS: Yes, for vote only. We won't go 
through, won't need to go through, any more testimony. You've 
been up here three times now. 

So, the motion is that this go over a week for vote 
only. We'll see you next week. 

Mr. Bilas, Energy Resources Conservation and 
Development . 

MR. BILAS: Correct. 

SENATOR PETRIS: You were here last week, too; 
weren't you? 

MR. BILAS: Several weeks ago, Senator, and I was out 
of town the last two weeks. So, I'm pleased to be back here 
today seeking your approval . 

SENATOR PETRIS: Did you make your opening statement 
then? 

MR. BILAS: I did not. And I have a very short 
statement that I'd like to make. 

SENATOR PETRIS: Okay, tell us why we should vote for 
you. 

MR. BILAS: Let me say first that I am pleased to be 



I 

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3 
4 
5 



18 
here, and pleased that Governor Wilson has chosen to reappoint 
me to the California Energy Resources Conservation and 
Development Commission. I am here clearly to seek your approval 
and confirmation so that I will have the opportunity to continue 
in my efforts to help move the state into the next century with 
a sound economic and environmentally balanced energy policy. 

I've spent five years on the Commission, one full 
term. And I think it would be unfair of me to take credit for a 
lot of things that have been done. Certainly the staff at the 
Commission has been most helpful, and certainly all of the 
participants, both from the public and private sectors, have 
been helpful to me in learning the many complex energy issues 
that exist for the State of California. 

Specifically, Senators, California is fortunate, I 
think, that we now have more interstate gas transmission 
capacity than we had five years ago. We have effective gas-on- 
gas competition with a new source of supply coming in from 
Wyoming, which just started in April of this year. That was a 
five-year battle that the Commission fought, and was fortunate 
enough to have the lead in that battle. 

We have the most effective energy emergency 
preparedness plan in the country, as out of all the 50 states. 
Indeed, our plan, which was revised in 1988 and will be revised 
again in 1993, and I was in charge of the revision in '88, is a 
plan that has been copied by at least 10 other states in the 
United States . 

We currently have the toughest energy building 



19 

standards in the nation, and yet they are cost effective. These 
standards were to have gone into effect in July of this year, 
but they will not go into effect for reasons that all of the 
manuals and documents are not yet available, but they will go 
into effect on the first of January, 1993. This was a consensus 
plan through the builders, architects, and other participants, 
environmentalists, and I was in charge of those standards. 

In our 1990 Electricity Report, we were the — one of 
the few states to take the challenge to try to build in 
environmental values for pollutants, and we are revising that in 
our 1992 Electricity Report. 

There is, I believe, clearly more to be done, and I 
would certainly like to be a participant in doing more for the 
State of California in its quest for an effective energy policy. 

I'm open to any questions that you gentlemen might 
have, and hopefully, I will be able to answer them. 

SENATOR PETRIS: Does anyone have questions? 

Let me ask you a couple. You have some overlapping 
functions both with the PUC and the Air Resources Board. 

MR. BILAS: That's correct. 

SENATOR PETRIS: Is the coordination between those 
three active, or just haphazard, or none at all? 

MR. BILAS: It's — well, none at all is not correct. 

In some instances, Senator, the coordination works 
very well. In other instances, clearly, one ought to step back 
and take a better look at what ' s happening and how we could 



20 
better coordinate. 

I think we're doing a reasonable job with the Air 
Resources Board; although, clearly our jurisdictions do, in some 
issues, overlap. 

We clearly could do a better job, however, with our 
sister agency in San Francisco, the Public Utilities Commission. 
This has been rather difficult and, in some instances, strained. 
Although I must say, recently, when we adopted our 1990 
Electricity Report, that became the foundation for their 
Biennial Update proceeding through which they were going to put 
out — they will put out the first competitive bid for new 
generation resources in the state. And the foundation for their 
competitive bid will be the 1990 Electricity Report almost in 
total. And so, I think there was a clear example of cooperation 
being possible, and I think that I look forward to this being 
carried on at every level between the two commissions. 

SENATOR PETRIS: Now, with the ARB announcing their 
goals, not just goals but mandates for emission and promoting 
alternate fuels, is your testing program going to continue? 

MR. BILAS: Testing of alternative automobiles? 

SENATOR PETRIS: Alternative fuels. 

MR. BILAS: Our alternative vehicles program 
certainly will continue, and I would hope that we will be 
active, not only at the alcohol fuel level as we have been, but 
more active at the compressed natural gas alternative fuel 
vehicles. We've been quite active in that recently, and indeed, 
with the electric vehicle development program. 



21 

There is a fine line, of course, between how far you 
go in the development program and when commercialization begins, 
and we're trying to find where that line is with all of our 
alternative fuel programs . 

SENATOR PETRIS: Are there any private companies 
working on the developing an electric car? 

MR. BILAS: Well, certainly General Motors, 
certainly, with their Impact. 

Right now, the development of the electric vehicle 
will, I believe, be a function of the ability of the battery 
consortium to develop batteries that will give more range 
between recharging of the vehicles. That's an active 
consortium, and I'm not, quite frankly, at this moment, up to 
date on just how far they have gone. I don't think there have 
yet been significant breakthroughs, but there will be electric 
vehicles on the road in the very near term. 

SENATOR PETRIS: It seems to me I read quite a few 
months ago, might have been last year, about a claim made by a 
Japanese company that they had developed a battery which was 
smaller, much more powerful than anything anywhere else, which 
would enable an automobile to increase its range by an enormous 
amount. And the thing that really caught my attention was, it 
took — they claimed it would take only about 15 or 20 minutes 
to recharge instead of hours. 

Are you familiar with that? 

MR. BILAS: I read the same article, Senator. I had 
— I took the article to our staff, and we have attempted to 



22 

follow up on that, and I have not gotten any feedback, but I 
read the same article. 

SENATOR PETRIS: I'd certainly be interested. 

MR. BILAS: I would certainly be interested in that, 
too. 

We have — we have looked — we have checked on that 
at the staff level. I have not had feedback. I simply do not 
know what the status of that battery is . 

I would — I would have to say that clearly it is not 
a commercial battery at this point, because there are no 
electric vehicles that are using those batteries. All the 
electric vehicles that are on the road today, or that are in the 
test stage, to my knowledge, are using the standard lead acid 
batteries. 

The consortium is trying to do something about that. 

SENATOR PETRIS: Are there any electric cars in 
Japan? 

MR. BILAS: I do not know. I do not know. 

SENATOR PETRIS: Or any other — 

MR. BILAS: I would presume that with the Japanese 
automobile manufacturers, there are some test electric vehicles 
in Japan, just as there are test electric vehicles in the United 
States . 

SENATOR PETRIS: What about England? England thirty 
years ago had trucks and all kinds of vehicles. 

MR. BILAS: They had some vans some years ago. I do 
not know the status of their development. 



23 

I would have to say that the development of the 
electric vehicle in this country is probably at least at the 
level of the development of the comparable vehicle in other 
countries simply because of the transfer of information. But I 
do not know that for a fact. 

That, frankly, Senator, is not one of the areas that 
I have had any responsibility for at the Commission. 

SENATOR PETRIS: You're just curious about it. 

MR. BILAS: Yes, I am curious about it. I think we 
all ought to be with environmental protection a major issue, and 
with resource diversity and fuel diversity as a major issue. We 
need to be sensitive to this. 

SENATOR PETRIS: Well, I was in England in 1966, and 
I met with people in their government and some private people 
working on this problem. And they had fork-lifts, and they had 
garbage trucks. They had milk delivery wagons; they had trucks 
with cranes, all powered by electricity way back then. 

Now, I don't know what they've been doing since, but 
we didn't have anything like that here, except when I was a 
little boy, there was a Merchants Express, green and red trucks, 
powered by electricity. A whole fleet of trucks delivering 
various merchandise around town with hard rubber wheels and 
spoke wheels, wooden, I guess. 

I'm talking grammar school days, and for me, that's, 
you know, that's a good hundred years ago. 

MR. BILAS: Grammar schools days — 

SENATOR PETRIS: They weren't horse-drawn. They made 



24 
that whining sound — 

MR. BILAS: — probably the same time back in my 
youth, we had electric vehicles on the East Coast, in New 
Jersey. 

SENATOR PETRIS: So how come we haven't advanced 
beyond that since then? We haven't even caught up. 

MR. BILAS: Senator, you are asking the wrong person. 
I don't know why we have not caught up. 

SENATOR PETRIS: Well, maybe we ought to give them 
some inducements . I have to revive some bills I had that would 
give lots of monies to a corporation or individual who came up 
with a good clean electric car. 

MR. BILAS: Clearly, incentives are what make the 
marketplace function, and I think any — 

SENATOR PETRIS: That's why I did it. 

MR. BILAS: — any inducements to develop alternative 
fuel vehicles that are efficient, I think, are worthwhile 
endeavors . 

SENATOR PETRIS: Any other questions? 

Anyone here care to testify for or against the 
confirmation? 

Okay, if not, Senator Beverly. 

SENATOR BEVERLY: Move the Committee recommend 
approval of the nomination. 

SENATOR PETRIS: We have a motion by Senator Beverly. 
Call the roll. 

SECRETARY WEBB: Senator Beverly. 



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SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

SENATOR PETRIS: Okay, we're recommending approval of 
the confirmation. 

MR. BILAS: Gentlemen, thank you very much. 

SENATOR PETRIS: Good luck. 

MR. BILAS: Thank you. 

SENATOR PETRIS: Mr. Rodriguez will go over, and item 
number four is Arlene Heath, Workers' Compensation Appeals 
Board. 

Senator Kopp has express an interest. 

Before we go any further, can you tell me, I've been 
looking for the numbers here, we usually have that. How many 
members are there on that Board, about 600? 

[Laughter. ] 

SENATOR PETRIS: It seems that every week, we have 
two nominees for this Board. It just never ends. I'm happy to 
see you, but how many are there, anyway? 

MS. HEATH: There are seven positions, of which there 



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are now six appointees. 

SENATOR PETRIS: Seven times six is 42. 

[Laughter. ] 
SENATOR PETRIS: There's only seven; is that it? 
MS. HEATH: Yes. In fact, one of them — 
SENATOR PETRIS: How many vacancies? 
MS. HEATH: One. 
SENATOR PETRIS: One? 
MS. HEATH: Of the seven positions, there is one 



vacancy 



filled. 



SENATOR PETRIS: Not counting yours. Yours is 

MS. HEATH: That's right. 

SENATOR PETRIS: Okay, I just wanted to clear that 



up 



Senator Kopp. 

SENATOR KOPP: Thank you, Mr. Chairman, Members of 
the Rules Committee. 

I'm delighted and honored to present to the Committee 
for recommended confirmation Mrs. Arlene Heath, an attorney par 
excellent whom I have known more years than either one of us 
wants to admit. But to be accurate, I have known Mrs. Heath for 
about 32 years as a practicing attorney in San Francisco. 

Her curriculum vitae, obviously, speaks for itself. 
She is a former professor at the Golden Gate University School 
of Law. She has practiced assiduously for more than three 
decades in San Francisco and the Bay Area. 



27 

As a matter of fact, she comes from a legal family. 
Her husband, who is not here today for confirmation, is a 
long-time San Francisco lawyer. As a matter of fact, he 
practiced law in the '60s with a firm specialized in labor law, 
representing unions and employee organizations, and then went on 
to a different career in administration. 

But Mrs. Heath is conscientious. She's intelligent. 
She might even be described, although I may be taking a risk 
here, as kind of a pioneer in terms of women lawyers in San 
Francisco. At the time she began practicing, there weren't very 
many. 

In the vernacular, in the parlance, she's paid her 
dues, Mr. Chairman. You and I remember those days. 

SENATOR PETRIS: Yes, very few and far between. 

SENATOR KOPP: It's far different from today, when in 
my son's law school, over half the class is female. 

She's honest, and she's scrupulous in her dealings 
with people. 

So, I recommend her most highly as extremely well 
qualified. 

SENATOR PETRIS: Thank you, Senator. 

Well, with that start, do you have anything else to 
tell us as to why we should support you? 

MS. HEATH: Well first, I wish to thank you, and I 
wish to express to you just how pleased and how proud I am to be 
here this afternoon seeking your approval of the Governor's 
decision to appoint me to this very important post. 



28 

Let me begin by telling you of my educational 
background. I received my undergraduate degree from U.C.L.A. I 
was Phi Beta Kappa, and I graduated with honors. I received my 
law degree from U.S.C., where I was a member of the Order of 
Coif and editor of the Law Review , and graduated third in my 
class . 

I might also add that I had no family financial 
support while I was either in college or in law school. I 
worked to support myself through school with the additional 
assistance of scholarships and loans, and so on. 

SENATOR PETRI S: What year did you get your law 
degree? 

MS. HEATH: I graduated in 1959, June of 1959. And I 
was — I took the Bar immediately and was admitted. 

I have spent most of my professional life in three 
separate but complementary professions: that of attorney, that 
of teacher, and that of arbitrator. 

My career as a practicing attorney has occupied the 
greatest portion of my professional life. I've had experience 
in a wide variety of legal fields, everything from probate to 
divorce, from landlord-tenant to labor. I have been a trial 
attorney in both civil and criminal cases. I have acted as 
counsel to a state agency charged with the enforcement of the 
state's securities laws. 

Immediately prior to my appointment to the WCAB, I 
was counsel for the State Compensation Insurance Fund, where I 
specialized in workers' compensation law. 



29 

In addition to the active practice of law, I have 
also been a teacher. For the most part, I taught part-time in 
law school, mainly Golden Gate University. And this was usually 
as an adjunct to my activities as a practicing attorney. I have 
taught criminal law and other courses in the Law School. I have 
also taught undergraduate courses in business law, and so on. 

By far my highest satisfaction as a teacher came from 
the five years I spent teaching in the Ivory Coast and Mali. 
These are two French-speaking countries in West Africa. I 
taught English as a foreign language at the University of 
Abidjan in the Ivory Coast. 

I also taught English to health professionals, to 
agricultural students, and business students. All of them 
either Malian or Ivorians; that is, natives of the Ivory Coast. 

But my greatest challenge, and my greatest rewards 
came from teaching both French and literacy to adults, 
primarily women, who had never had the advantage of any formal 
academic training. 

My third major professional career was as a labor 
arbitrator. I served as the neutral arbitrator in over 100 
cases. My function was to adjudicate the rights of the parties 
under a collective bargaining agreement. I conducted the 
hearing, heard the witnesses, evaluated the evidence, and 
rendered a written decision. Only one of my decisions was ever 
appealed to a higher court, and in that case the court upheld my 
decision. 

I have been serving as Commissioner since September 



30 
of last year. During that time, I have participated in over a 
thousand decisions. 

I first would like to talk very briefly about my role 
at the Board and the role of the Board. 

California, as you know, adopted a workers' 
compensation system in the early part of this century. The 
California Constitution was amended to provide for a system of 
getting the rights of injured workers taken care of, and I 
quote, "expeditiously, inexpensively, and without encumbrance of 
any character," end quote. 

As it happens, I think the vast majority of workers 
who are injured on the job get the benefits due to them in a 
timely fashion. However, there are always instances where the 
parties cannot settle their disagreements. When that happens, 
the process of adjudicating the differences is set in motion. 

In most cases, it is the injured worker who seeks the 
assistance of the Board, but not always. In a not insignificant 
number of cases, it is the employer, the insurance carrier, or 
the provider of medical or other services who sets the process 
in motion. 

Even after the jurisdiction of the Board is invoked, 
most parties go on to settle their differences on their own. 
The Board is called upon only to approve any settlement, to make 
sure that no unfair advantage has been taken. 

The remaining cases, that is, those in which the 
parties are unable to settle their differences, are heard and 
decided at a hearing presided over by a Workers' Compensation 



31 
judge. The judge holds a hearing and renders his decision. In 
most instances from these cases, that is the end of the 
proceedings. The parties accept the decision of the Workers' 
Compensation judge. 

However, a party who is dissatisfied with the 
decision has the ability to seek further review by the Workers' 
Compensation Appeals Board, and usually this is by way of what 
is called a Petition for Reconsideration. It is the review and 
disposition of these Petitions for Reconsideration that 
constitute the major portion of the responsibilities of the 
Commissioners . 

So, every case that comes to the Commissioners 
represents a very real conflict. The parties were unable to 
settle their differences without the assistance of the Board. A 
judge has listened to their case and has made a determination. 
And even then, at least one of the parties feels that his or her 
rights have not been vindicated and seeks review by a higher 
authority. 

So thus, the cases which reach the Commissioners tend 
to have a long history, and as one might expect, feelings can 
run very high. And it is at that point in time that the 
Commissioner is called upon to use his or her skills to resolve 
the conflict. 

The cases present a challenge to a Commissioner to 
analyze the facts, apply the correct law, and come to a just 
decision. There are often voluminous records, including highly 
technical medical reports, which must be reviewed. 



32 

I believe that my own life experience, my education, 
professional training, and temperament well suit me to deal with 
the legal, factual, and medical analysis necessary to resolve 
the disputes. The variety of my life's experiences have given 
me the flexibility to deal with the various scenarios which come 
before me. My years as an arbitrator have taught me to be 
comfortable with making decisions. My years at the State 
Compensation Insurance Fund have given me a special expertise in 
the field of workers' compensation law. 

I would say that first and foremost, I never forget 
that my decision has a profound effect on the lives of the 
people who come to the Board for assistance. I would say that 
my approach, I might even say my philosophy, is to consider the 
rights of each party as I would hope that my rights would be 
considered were I in their place. 

Thank you, Senators, for your kind attention. 

SENATOR PETRIS: Thank you. 

Any questions from the Members? 

Anyone desire to testify in the audience? 

How many cases do you handle? 

MS. HEATH: As a Commissioner, I don't have an 
accurate statistic, but I would imagine we review about 40 or so 
a week, maybe more. That's not a precise number, Senator; it 
varies. Sometimes the numbers go up, sometimes they're — 

SENATOR PETRIS: Is that stressful? 

MS. HEATH: It's a challenge. 

SENATOR PETRIS: More than trying a case? 



33 

MS. HEATH: They both present — each function 
presents its own challenge, I believe. 

SENATOR PETRIS: That seems to be a buzz word now 
considering any matter involving workers' comp. They have it in 
the T.V. ads now. What was the name of that report? It ' s a 
deodorant manufacturer that gave its name to a report regarding 
stress on the job, and recommends use of this deodorant because 
everybody has stress on the job; therefore, everybody should use 
this particular deodorant. So, I guess it applies to any kind 
of work you do. 

How is the '89 statute that imposes a deadline for 
hearing cases working out? 

MS. HEATH: Well, those cases are just now beginning 
to go through the system. It does take a while for somebody who 
is injured in 1990 to have their case heard. And I have not 
seen any statistics on that in order to evaluate it. 

SENATOR PETRIS: It's too early? 

MS. HEATH: It's just beginning, since the law took 
effect January 1, 1990. 

SENATOR PETRIS: Yes, that's not a lot of time. 

How do you measure the backlog? In terms of days? 

At the lower level, they measure it in terms of shelf 
feet: shelf feet of files or correspondence. 

Do you have the same system, or do you have a 
backlog? Maybe you're all caught up. 

MS. HEATH: To be honest with you, as a Commissioner, 
I'm really not that involved in the administrative side. I 



34 
could certainly find out the statistics, but I do not have them 
available at this time. I really don't know. 

SENATOR PETRIS: I was wondering if it's bad enough, 
if you're under a lot of pressure to keep moving it along when 
they get to your level. 

MS. HEATH: Well, we hope to handle things 
expeditiously. The parties, if nothing else, the parties are 
anxious to have their cases resolved, and I think that's very 
important . 

SENATOR PETRIS: Does this take all your time now, 
full time? 

MS. HEATH: Yes, this is a full-time job. 

SENATOR PETRIS: Any other questions? 

SENATOR BEVERLY: Move the Committee recommend 
confirmation . 

SENATOR PETRIS: We have a motion for confirmation. 

Call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris. 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 



35 

Three to zero. 

SENATOR PETRIS: Your nomination will go to the 
Floor. It's up to Senator Kopp and the rest of the Senators to 
take it from there. 

MS. HEATH; Thank you very much. 

SENATOR KOPP: Thank you, Mr. Chairman. 

SENATOR PETRIS: You're welcome. 

We'll take a five-minute recess. 

[Thereupon a brief recess was taken.] 

SENATOR PETRIS: The Committee will resume its 
meeting. 

We have two Members, and a third will be here 
shortly. We can proceed as a subcommittee for the time being. 

Now we have Dr. David Werdegar, Statewide Health 
Planning and Development. 

Am I pronouncing it correctly? 

DR. WERDEGAR: That is correct. 

SENATOR PETRIS: You've had a chance to see some of 
the other nominees in the ritual, so tell us why it's a good 
idea to support you for confirmation. 

DR. WERDEGAR: Thank you. 

I'll tell you a bit about myself. I've been a 
physician here in California for 35 years, since the time I was 
an intern at the University of California in San Francisco. 

Actually, most of my career was associated with the 
University in San Francisco, with the Medical School, where, 
over time, I would say my best contributions were in the arena 



36 
of training physicians and nurses, mainly, for career in primary 
care, family medicine. And the areas in which I taught medical 
students and had great interest had to do with health care in 
the context of family, culture, community, and those factors 
that presented obstacles to health care. 

My career took a significant turn in late 1984, when 
I was asked by then-Mayor Diane Feinstein to serve as the head 
of the Health Department in San Francisco. It was the 
beginnings of the AIDS epidemic. I had bee significantly 
involved in teaching at the San Francisco General Hospital and 
was the School's Associate Dean out there. But that was the 
center of care at the beginning of the epidemic for those with 
HIV. Whether that was the reason, I actually don't know how 
exactly she got my name and called on me. I didn't ask her that 
question. But she got my name and asked if I would consider the 
position, and after initial reluctance, I did that and served, 
as it turned out, for three years for Mayor Feinstein and for 
three years with Mayor Agnos . 

At the end of the fifth year, however, I felt I had 
made my major contribution there and should return to the 
University, and so gave a year's notice in which to find a 
successor at the Health Department, and then returned to the 
University in the fall of 1990. 

It was in the spring of this past year, 1991, that I 
was asked to consider the job at the Office of Statewide Health 
Planning, and then was appointed last July by Governor Wilson. 

I was very interested in the position because it did 



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coincide with many of my interests, and I saw it as a unit of 
state government that could make in these times an exceptional 
contribution. As its name suggests or connotes, it's an office 
that ' s devoted to statewide health planning and statewide health 
development . 

In the health development sphere, I think its most 
important roles are in helping support family physician and 
nurse practitioner training, and in helping recruit more young 
men and women of minority backgrounds into the health 
professions. And it has in each of those arenas an excellent 
track record, which was attractive to me in accepting the post. 

It also plays a role in the development of 
facilities, health facilities for California through its very 
important Cal Mortgage Program, which guarantees the financing, 
the mortgage financing, for health care facility construction. 
And while that was not a program of initial interest to me, 
since it was in the world of finance and bonds and investment 
counselors, I quickly learned that it was an especially 
important program because it is the access to funding for many 
health care facilities who might not otherwise be able to 
develop their facilities, especially, to my view, small 
community-based organizations, substance abuse treatment 
centers, primary care clinics, facilities of that sort. 

So, those were the — that's what the department, the 
Office of Statewide Health Planning does in terms of health 
development in California, speaking very briefly to the point, 
but health personnel development and facilities development. 



38 

And the other part of the Office's obligations are in 
the realm of planning. Let me just interject parenthetically in 
facilities, we do have a responsibility also of checking that 
health care facilities are seismically safe and have — meet the 
fire, life safety conditions, and a part of our department is 
devoted to that task. We have a Facilities Branch that is 
involved in all hospital construction to be sure that it's 
seismically safe. It stems from Senator Alquist's legislation, 
to be sure that hospitals are built with recognition of 
California's earthquake problems. 

Now, turning to the planning side, I believe that the 
Office has a contribution, an important contribution, to make in 
these times in which health care issues have really risen to the 
fore, as we look at our domestic issues and social concerns. 
I'm aware of your legislation, Senator Petris, in this regard, 
at least with regard to health insurance. But I think issues of 
insurance coverage, access to health care, containing the costs 
of health care, those are now dominant and exceedingly important 
issues . 

I would like to believe that, based on the background 
of experience that I've described to you briefly, I would 
persuade the Rules Committee that I have qualifications as I 
have a background of experience and education from a number of 
realms that might contribute in this important sphere. 

SENATOR PETRIS: Thank you very much. 

Any questions from the Members? 

Anyone in the audience desire to testify? 



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This statewide planning has to do mostly — did you 
want to testify? 

MR. KELCH: Just very quickly. 

SENATOR PETRIS: Okay, let us have your name and 
organization, if you're representing one. 

MR. KELCH: Yes, Derrell Kelch with the California 
Association of Homes for the Aging. 

We have submitted a letter in support of 
Dr. Werdegar, and just quickly indicate that in the short time 
that we have worked with Dr. Werdegar, we have found him to be 
accessible. We had the privilege of having a lengthy meeting 
with him shortly upon his arrival, and we were impressed with 
the amount of knowledge he had, particularly in the area of 
long-term care, and a feeling of his commitment to older people 
and to long-term care. 

And so, we would like to offer our support and urge 
your aye vote. 

SENATOR PETRIS: Thank you. 

Long-term care is included in my bill that the Doctor 
mentioned. I guess you're aware of that. 

MR. KELCH: Yes. 

SENATOR PETRIS: Do you do a lot of coordinating with 
local county health officers in the planning area at all? 

DR. WERDEGAR: I hope that we will have a significant 
role in that regard. 

I know the health officers quite well, naturally, 
from having served for six years and being part of that 



40 
organization. And in fact, of course, when working at the local 
level, we had our own perceptions of how things were up in 
Sacramento. And I hope I bring some of that experience now to 
Sacramento in making local health officers and health directors 
feel comfortable, feel that they have a receptive ear in 
Sacramento, and that we in the Health and Welfare Agency 
understand the very tough problems with which they're dealing. 

We've been meeting with them on such issues as how 
data is collected, and what is useful and what isn't, and what 
is relevant for policy and planning and accounting to see that 
good health care is being given. We've talked with them quite a 
bit about realignment, and the funding issues that surround 
realignment for local health departments. 

SENATOR PETRIS: How about epidemics? Do you work on 
that? 

DR. WERDEGAR: Well, my significant — 

SENATOR PETRIS: We've got tuberculosis stalking us 
in the prisons and elsewhere, and measles has been on the 
increase. 

Is that part of your jurisdiction? 

DR. WERDEGAR: It isn't now. I would say that's more 
the Department of Health Services, Dr. Coye ' s Department. 

It was at the local level a significant 
responsibility. 

SENATOR PETRIS: Years ago I carried some legislation 
regarding public health and included some bills on immunizing 
children. And it was so successful that health officers said, 



41 
"We don't need it anymore." Periodically, I thought we'd have 
to renew it, but they miscalculated. I wish we had kept it up. 

Do you think we ought to — is it necessary to 
restore the program with legislation? 

DR. WERDEGAR: I don't know the details of the 
legislation to comment. I think universal access to 
immunization for all children in California is a necessity. 

SENATOR PETRIS: It ought to be a standing policy; 
shouldn't it? 

DR. WERDEGAR: I would wish to see that, yes. 

SENATOR PETRIS: Who's your favorite philosopher? 

DR. WERDEGAR: It was David Hume, although I don't 
know why you asked me that . 

[Laughter. ] 

SENATOR PETRIS: You have a Master's Degree in 
Philosophy. I'm impressed. You've got a whole bunch of degrees 
here outside of medicine. 

DR. WERDEGAR: Yeah, I've got degrees. It just 
happened along the way. 

SENATOR PETRIS: Fair enough. It probably helps you 
in your long-range view of the world. 

DR. WERDEGAR: Well, it allows me to be reflective 
from time to time. 

SENATOR PETRIS: Was Galen much of a philosopher in 
addition to being a doctor? 

DR. WERDEGAR: Some. That is to say, he saw Man in 
relation to the universe and some balance between the two. 



42 

Actually, I would say that having had that 
undergraduate study of philosophy has oriented some of my views 
to health care. I mean, I see health care as — while I 
treasure what the doctor does in the interrelationship between 
doctor and patient, at bedside or in the office, I do see health 
care as having a much more fundamental role in society, and 
perhaps view it in those philosophical terms. 

SENATOR PETRIS: Thank you very much. 

SENATOR BEVERLY: Move we recommend approval of the 
nomination. 

SENATOR PETRIS: Senator — 

SENATOR MELLO: Mr. Chairman, I'm must interested 
about the link you have between yourself and the University of 
California. It's similar to one we had a few months ago with 
Dr. Fessler from the University of California at Davis, who was 
appointed to the Public Utilities Commission. 

As I understand, the arrangement you have is somewhat 
similar, in that the state pays your salary to the University of 
California at San Francisco, then they in terms pay you. And I 
guess this is done to maintain your retirement with the 
University; is that correct? 

DR. WERDEGAR: That is correct, and maintains my 
tenured professorship. At the conclusion of my work in 
Sacramento, I would choose to return to the University to teach. 

SENATOR MELLO: It's also true that you also get 
extra payments from a research contract you have there at the 
Medical School, in addition to your salary? 



43 

DR. WERDEGAR: That is true. There is one research 
project of which I'm the principal investigator for the next 
four years. That is, it's a five-year commitment, and I had 
just recruited the staff together in this community-based 
project at the time that I was asked to serve, and asked and 
said that I thought I could continue that project, which I felt 
was an important one in which I had commitments . 

It's a federally funded, through Drug Abuse Center, 
project. And the various parties that looked at whether that 
was permissible, legal, and so forth, agreed that it was. That 
is, it was done having laid all of the considerations out for 
all parties to look over and be sure it was right. 

SENATOR MELLO: Right. 

Have you submitted a copy of your contract with the 
University to the Rules Committee, Ms. Michel, or not? 

DR. WERDEGAR: I believe our counsel for the Office 
of Statewide Planning has done so. Ms. Michel would probably 
know better. 

I know that there was a discussion between our 
counsel, who's actually here, John Roscoff, and if not, the 
Rules Committee, the Senate Office of Research. So, I believe 
that's where the information was transmitted. 

SENATOR MELLO: I think it would be proper — do you 
have a Legislative Counsel ' s opinion as to the arrangement 
between your contract and the University? 

DR. WERDEGAR: Yes. Well, there was combined 
consultation, I would say, of the attorneys for the University, 



44 
for the Governor's Office, and for the counsel of the Office of 
Statewide Health Planning. So, I believe it was very carefully 
reviewed . 

SENATOR MELLO: I think in the case — I don't know 
if the Rules Committee wants to look into this or not — in the 
case of Mr. Fessler, who was a professor at Davis, our 
Legislative Counsel, upon review of the contract, found that the 
arrangement there was determined to be, in the words of 
Legislative Counsel, to be improper for a number of reasons, 
mainly because they made a finding that the arrangement gave the 
University the potential of having undue influence over the 
actions and decisions of the appointee. 

It suggested a similar potential may exist in your 
case. 

DR. WERDEGAR: I think there's a — 

SENATOR MELLO: Doctor, perhaps, I think Dr. Fessler, 
while he came to the Rules Committee, I think he revised his 
agreement. I'd have to ask Ms. Michel, if I might. I think he 
changed his agreement with the University to detach himself from 
that situation and come up with a different way of handling the 
retirement . 

DR. WERDEGAR: I think to some extent mine was 
crafted similarly. That is, I know that the issue was 
discussed, and that attorneys who understand these things better 
than I looked at how it should be done so that it was acceptable 
both for state government and for the University. 

The University — and I knew about Dr. Fessler. I'm 



45 
told that the nature of my appointment is somewhat different in 
that he is, I think, a so-called constitutional officer. I 
don't really understand all of these distinctions exactly, but 
his appointment is somewhat different than mine, and actually, I 
think, has a more rigid, some more rigid requirements in certain 
respects . 

In any event, I believe the matter was reviewed quite 
thoroughly from a legal point of view. I had asked that it be. 

SENATOR MELLO: Mr. Chairman, if I could ask Ms. 
Michel, was Dr. Fessler's contract with the University modified? 

MS. MICHEL: Yes, it was changed. 

What I might suggest to you, Senator, is that we, 
during the period of time when Dr. Werdegar's name is on the 
Senate Floor, that we get a resolution from Legislative Counsel 
and have an answer for you at that time, before it comes up on 
the Floor. 

SENATOR MELLO: I think that would be beneficial, 
mainly because, while being on the Public Utilities Commission 
versus the University of California at Davis, there's probably 
very little linkage between their functions, but as Director of 
the Office of Health Planning in this state, linked with what I 
call the finest Medical School in the whole world, the 
University of California at San Francisco, I just talked this 
morning with Chancellor Julie Krevins, not because about you, 
but in regard to their fine medical programs there, but there is 
this potential of close linkage to the University there, which 
in my opinion, I wouldn't mind as a personal person, because I 



46 
like them. I like the way they operate there. I think they're 
doing a great job. But I just think we have to separate 
official duties of people who are on staff, as you are with your 
new position here, and any linkage that you would have with the 
University of California at San Francisco Medical School. 

DR. WERDEGAR: Well, I understand the concern. I 
would leave it to attorneys skilled in these matters, as I 
thought had been the case. 

SENATOR MELLO: Let me ask Ms. Michel another 
question. 

Was Dr. Fessler able to maintain his retirement plan 
with the University? 

MS. MICHEL: Yes. It was arranged in a totally 
different way, and so it was covered. 

SENATOR MELLO: I'm not trying to endanger your 
retirement, because certainly it's something you've earned, but 
it might be that you could enter into — and this, of course, is 
up to the attorneys — a contract, and you'd be an independent 
contractor with the University somehow, under the similar way we 
did for Mr. Fessler, that would maintain whatever benefits 
you're entitled to, but make the separation between an active 
employee — 

DR. WERDEGAR: Right. 

SENATOR MELLO: — serving on a — 

DR. WERDEGAR: And I believe that that's precisely 
what was done. You actually articulated it better than I was 
able to. 



47 

But that matter should indeed be verified. 
Obviously, the University has a mechanism to allow its faculty 
to leave and take positions in public service, since one of the 
recognized roles for faculty is public service. 

And I might say that it just so happened mine is a 
somewhat odd career because of having been requisitioned to 
serve as the San Francisco Health Director. But during those 
six years, I was on leave from the University. 

SENATOR MELLO: So, Mr. Chairman, I certainly would 
have no objection supporting his moving to go to the Floor if we 
could have him provide to Ms. Michel, through your counsel, 
perhaps, so that our Legislative Counsel can review your 
contract, and then in order to report back to the Rules 
Committee if it might require a modification of your present 
contract in order to bring it into conformity, as we have with 
Mr. Fessler. 

So, that would be agreeable with you? Do you agree 
with that concept, then, of supplying the information to our 
staff? 

DR. WERDEGAR: Oh, without question, sure. 

SENATOR MELLO: Thank you. 

SENATOR PETRIS: Do you have any fears that the 
University would lean on you? 

DR. WERDEGAR: Well, first, I'm a tenured professor. 

[Laughter. ] 

SENATOR PETRIS: I'm just observing your demeanor 
here. I don't think I'd want to lean on you, myself. 



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[Laughter. ] 

DR. WERDEGAR: I feel I would actually give full 
measure and be quite independent of any University influence in 
the conduct of the job. 

SENATOR PETRIS: Any other questions? 

SENATOR BEVERLY: Move the nomination. 

SENATOR PETRIS: All right, Senator Beverly moves, as 
he did previously, that we recommend confirmation. 

Call the roll. 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris . 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

SENATOR PETRIS: That's three to zero; your 
confirmation will be recommended to the Floor of the Senate. 

DR. WERDEGAR: Thank you very much. 

SENATOR PETRIS: Thank you. Good to have you with 
us . 

DR. WERDEGAR: Thank you. 

SENATOR PETRIS: And good luck. 



49 

Now we have, oh, what do you know, another Workers' 
Comp. Appeals Board. 

[Laughter. ] 

SENATOR PETRIS: Jane Weigand. 

Senator Davis, I think, is interested in this 
appointment. Do you want to come forward, Senator? 

Do you vouch for this lady? 

SENATOR DAVIS: Yes, I sure do. 

Distinguished Members, I congratulate you on having 
convinced the public that you remain here. 

[Laughter. ] 

SENATOR DAVIS: I was afraid, so I decided to retire. 

I've known Jane for several years, and she's a 
distinguished graduate of the University of San Diego Law 
School, and she has received an award as a Distinguished Alumni 
there . 

And she has served in many important legal positions, 
including as a counsel, I guess, to the U.S. Attorney's Office. 

MS. WEIGAND: U.S. Department of Justice. 

SENATOR DAVIS: Department of Justice, and received 
two commendations there. 

She has also practiced as a deputy city attorney, 
Senator Beverly, and a city attorney, who was engaged in that 
practice for many years, and served as counsel for a Fortune 100 
company. So, she's covered the waterfront in her practice of 
1 law. 

She is someone who engages herself in community 



50 
service, including one of my favorite charities, the Good Will 
Industries. She's on the Bay Area Board of Directors of that. 
And also in her local Rotary Club, which is now San Francisco, 
she's on the Scholarship Committee. 

And she served on the State Economic Advisory 
Committee. And she's raised two fine sons. One is a journalist 
in Tokyo, and the other, whom I know and Senator Mello knows, is 
in our California local film industry. 

So, her husband, Jeff, is here, is a copartner in a 
toxic removal firm, which is one of the great things that has to 
be done in our society. 

So, I think Jane Weigand is highly qualified to serve 
in the position to which the Governor appointed her. I think 
she will do — she will get outstanding awards for doing that 
job also. 

SENATOR PETRIS: Thanks, Senator. 

Would you like to make any further comment on your 
qualifications? 

MS. WEIGAND: Thank you, Senator Davis. 

Well, I'd like to thank you Senators for being here 
today. With the primary yesterday, I know you probably had late 
nights, and I really appreciate you going ahead with this 
hearing. As you know, it's a very important day in our lives, 
those of us here to testify. 

I've had diverse legal background. I've served in 
the public sector and in the private sector. In the public 
sector, I've served at all three levels of government: local, 



51 
state, and federal. And in the private sector, I've been a 
senior attorney for a Fortune 100 company, as well as counsel to 
many small business owners. 

In addition to that, I've taught at five 
universities. So, all this experience, I think, has given me a 
balanced perspective that I bring to my present job. 

But perhaps most importantly, I have a reputation for 
integrity. I'm fair. I decide the cases based on the facts and 
the law. And I'll do my best to be a credit to you and to the 
State of California if I'm confirmed. 

Thank you. 

SENATOR PETRIS: Any questions? 

Anyone in the audience desire to testify? 

How long have you been on it? Since August? 

MS. WEIGAND: We were sworn in the last day of 
August, but we actually began in September. 

SENATOR PETRIS: Are there any flaws in that system 
due to defective statutes or regulations that we can take care 
of that you want to call to our attention? 

MS. WEIGAND: I'm sure you'll be hearing from others 
who've got ideas along that line. 

We're getting acquainted, of course, with the new 
legislation, and we're looking at ways that we might take care 
of things and come back to you with some suggestions. 

SENATOR PETRIS: I would encourage both you and 
Ms . Heath to do that . 

Some of the nominees I've asked that question in 



52 

other agencies, and they seem to be gun shy. They say, "Oh, 
that's not our job. Our job is simply to carry out these 
functions, and it's not our job to advise the Legislature. 
That ' s your job . " 

But how are going to learn about these things if we 
don't get it from you? We don't go to these hearings. We don't 
go to the Appeals Board. We get it in the form of complaints 
from petitioners or from lawyers . 

But I'd think it would be helpful to us, as you move 
along, if you find areas that you think need improvement through 
some statutory change, we'd like to hear about it. 

MS. WEIGAND: Thank you, Senator. 

SENATOR PETRIS: So, do you promise to let us know? 

MS. WEIGAND: I promise, my word of honor. 

SENATOR PETRIS: Okay, Senator Beverly. 

SENATOR BEVERLY: Move the — 

SENATOR MELLO: I'd like, if I may, to move her 
recommendation to the Floor. I've known her and think very 
highly of her. 

I joint with Senator Beverly in making that motion. 

SENATOR PETRIS: All right, Senator Mello and Senator 
Beverly move. 

Now, if I'm silent, I think my conduct would be 
suspect. So, may I join my colleagues? 

[Laughter. ] 

SENATOR PETRIS: At any rate, we have a motion. Call 
the roll. 



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SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris. 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti. 

Three to zero. 

SENATOR PETRIS: That's three-zero. 

Congratulations . That means it goes to the Floor 
with a recommendation for your confirmation. 

MS. WEIGAND: Thank you all very much. 

SENATOR DAVIS: Thank you. 

SENATOR PETRIS: Now we have Mr. Casey Young, 
Administrative Director, Workers' Comp. 

MR. YOUNG: Good afternoon. Congratulations to all 
of you. 

SENATOR PETRIS: Thank you. 

MR. YOUNG: I don't have anybody to introduce me. 

[Laughter. ] 

SENATOR PETRIS: Well, I think Senator Greene would 
if he were available. 

MR. YOUNG: Should I just — 

SENATOR PETRIS: Yes, just tell us why we should — 



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MR. YOUNG: Casey Young, Division of Workers' 
Compensation . 

The qualifications for this position, my knowledge 
and experience in the workers' comp. has been acquired really 
all while employed by this institution, the Senate, for the last 
twenty years, fifteen of those years with the Senate Industrial 
Relations Committee. 

During that time, I've had the privilege, I guess, of 
working with all the various attempts to change the system — 
minor ways, major ways — become very familiar with the issues, 
and what ' s been tried to do over the years , and what the intent 
of the Legislature was. 

I've got to tell you, I didn't seek this job. When I 
was asked about it, I had to think a least twice about it. One 
of the things that kept going over in my mind was, you know, I 
remember every one of those laws that was passed, and I don't 
think it was implemented, or it wasn't implemented correctly. 
And if I get over there, I better pay attention to that and make 
sure that gets done . 

So, I really couldn't pass up the opportunity. 

Among other things I've done is, for a year, I spent 
— did double duty, basically, with Industrial Relations 
Committee and the Joint Committee to study the workers' comp. 
system. I've done a lot of, oh, conferences, and so forth, on a 
national level. I did a national symposium on workers' comp. 
last year at Rutgers. I did a similar thing at the University 
of Connecticut, and one for the American Bar Association. 



55 

I think I ■ ve got a pretty good background and 
knowledge in workers' comp. # not just in this system in 
California, but overall. And we're not the only state that is 
having real problems with the workers' comp. system. We're all 
struggling. A lot of us are struggling with the same kinds of 
issues. And we've been talking, both NCSL, and I participated 
in their task force on workers' compensation, and once I took 
this job, they moved me over to their Blue Ribbon Advisory Panel 
to the task force. Very familiar with those kinds of issues. 

I think I have a good working relationship, first 
with the Director of the Department of Industrial Relations. In 
fact, he is the person who approached me about taking this job. 
He is — actually, I went to high school with him, and he was 
looking for somebody who was knowledgeable and who he could 
trust in this position. It's been a sensitive one. It's been a 
difficult one. 

As you all know, this is a program that is very 
sensitive. It means a lot to a lot of people, especially to 
injured workers, but also to a lot of other people. It's about 
$11.4 billion program, last I looked, and increasing fairly 
rapidly. 

Also, I have, I think, a good working relationship 
with the various interest groups that are involved in this area. 
And I think you need that in this kind of a position. We're 
going to be dealing, I'm sure, with legislation again in this 
area, and I know I'm dealing with a plethora of administrative 
issues in this area. 



56 

And I think I have a reputation for being open and 
accessible, and I think that's what you need to do to get 
through the issues in this difficult area. 

Thank you very much. 

SENATOR PETRIS: Well, as a Member of the Industrial 
Relations Committee, I can verify what you say about your 
experience and knowledge, certainly. 

Any questions? Do I hear a motion. 

SENATOR BEVERLY: So move. 

SENATOR PETRIS: Senator Beverly moves confirmation. 

Call the roll. 

Is there any opposition in the audience or support? 

SECRETARY WEBB: Senator Beverly. 

SENATOR BEVERLY: Aye. 

SECRETARY WEBB: Beverly Aye. 

Senator Mello. 

SENATOR MELLO: Aye. 

SECRETARY WEBB: Mello Aye. 

Senator Petris. 

SENATOR PETRIS: Aye. 

SECRETARY WEBB: Petris Aye. 

Senator Craven. Senator Roberti 

Three to zero . 

MR. YOUNG: Thank you very much. 

SENATOR PETRIS: Congratulations. 

MR. YOUNG: Thank you. 

SENATOR PETRIS: Your nomination will go to the 



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Floor 



[Thereupon this portion of the 
Senate Rules Committee hearing 
was terminated at approximately 
3:50 P.M. ] 

— ooOoo — 



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CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of 
the State of California, do hereby certify: 

That I am a disinterested person herein; 
that the foregoing Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel 
or attorney for any of the parties to said hearing, nor in 
any way interested in the outcome of said hearing. 



hand this 



IN WITNESS WHEREOF, I have hereunto set my 
/ day of June, 1992. 




EVELYN J. /MIZAK 
Shorthand Reporter 



202-R 

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